I looked at my high school yearbooks quite a bit at the time, and occasionally in years since. Errors were quite few. Friends signing each others' yearbooks with greetings, memories, and humor was a thing back then.
I think Northam was honest at the first when he acknowledged he was in the picture, and later tried to weasel out after realizing one face was pretty much unrecognizable and the other covered. Brazening things through has been D pols' favored approach to scandals since Bill & Hill in the 1990s.