“Your dad's dead!”
James served in the Conerian Military as an ace pilot and got married to some bitch. He was rumored to have had done the dirty with Wolf O'Donnell but that's just hearsay. Really this part is boring so let's just skip to the Game's intro.
The Star Fox team of which James was in, along with Peppy Hare and a piggy was formed after Andross blew up their home planet and caused global warming on the planet Fortuna, (Experts say that the planet will turn into a rainforest by Star Fox: Assault). In SF64, it was told that James was killed by Andross after Peppy got his ass handed to him by the treacherous pig.
In reality, James was a zombie all along, and therefore, can never die, because was always dead. This would also explain why Fox's mother is never mentioned, as it is most likely that she was eaten, by said zombie dad. Probably in a traumatic incident that has scarred Fox for life.
He still makes appearances in Fox's life, saving him and his crew at the last minute then banking sharp turns in his zombie-wing-arwing, and somehow dissolving into the background while nobody seems to notice or care. However, James McCloud has been preoccupied with his highly lucrative racing career where he is doomed to constantly get his ass kicked by Captain Falcon, but hey, he drives better than you!