Most Shoony live on the Isle of Kortos, the island that Absalom is built upon. Since Ustalav has a coastline on the Inner Sea, it wouldn’t be too unreasonable that a more adventurous shoony might have taken a boat North. There probably wouldn’t be any big shoony settlements in Ustalav though.
Generally one person can travel from more or less anywhere on Golarion to anywhere else on Golarion, and that's how you can explain how a PC got where they were.
Shoony being a rare ancestry means they're really only found in one place and don't usually travel, but PCs are singular individuals and any one person is capable of traveling.
Also, Ustalav is human-dominated, with even dwarves being less common (though you'll note that settlements include at least a smattering of dwarves, elves, and others wherever they are, so a shoony may be an oddity but do are many things.
Aside from that, rural Ustalavs tend to be superstitious and suspicious, but honestly I'm not seeing anyone taking the adorably pug faced irrepressible shoony for a werecreature or other threat. People would stare, maybe wonder if they were a goblin (as gnomes are thought to be fairies), but I don't think even in these cases the shoony would necessarily have issue thanks to their singularly loveable appearance.
More doggo folks! Corgi bards would inspire hope and happiness.
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Ustalav is far north of Absalom, it has a coast on Lake Encarthan, not the inner sea.
You could take the river through Cassomir, past Andoran, Taldor, Kyonin, Galt, and Razimir and end up in the lake but that journey, going the other way, is basically an entire book of Strange Aeons so maybe it's something the PC's parents did since they were higher level than their kid.