This is an incredibly unique and fun name. I'm surprised it's a German name, though-- I associate this name with Lilo & Stitch, as I'm sure many people do, and it takes place in Hawaii.
Lilo is a really pretty name! I wouldn't pronounce it like Behind the Name says to, I would pronounce it Lil-oo. One of my favorite names is Lilu, which is also pronounced Lil-oo.