Nah. Pretty sure this is the first remake taking place in an alternate dimension/timeline. FRLG and HGSS are both definitely part of the original timeline. They had to make this one alternate because you can catch all the damn legendaries in that game, which makes no sense original storyline wise.
Sure it does. It was never said that there was only ever one of any Legendary Pokémon aside from Mewtwo. In theory, there could be multiples of all of them, even the Creation Bunch.
HOWEVER, this multiverse concept does explain the differences between the GBA/DS era and the 3DS era (Mega Evolution having existed for all this time, Mewtwo being in Kalos instead of Kanto, etc.).
And anyway, it's really very simple actually. We just have two different continuities now, but it's not like we couldn't have already assumed that to be the case for the GB/GBC games in relation to the GBA/DS games. Now it's just:
Universe 1: RGB (and Yellow, I guess, if you're into that kind of thing) > GSC
Universe 2: FRLG/Emerald > HGSS/Platinum > BW > B2W2
Universe 3: ORAS > XY (Or is it the other way around? I don't have confirmation on this yet.)