I think her reverence of the painting may have to do more with her wanting to have the same fulfillment and sense of purpose as the noble princesses of old, rather than wasting her days shut up in the castle. The Rumor Guy might have misinterpreted her actions to be more romantically-inclined...
One thing: at the end of ALBW Zelda and Link end up in Hyrule's Sacred Realm/Golden Land. This shows that Lorule can't be the restored Sacred Realm, since it is shown to still exist in its old form. Cool theory though!
Dark link is a different thing with a different origin in every zelda game. In OoT he's probably an apparition conjured by ganondorf, or a shape-shifting Nightmare like the one in Link's Awakening.
From what i've heard, in FSA they're/he's created with the dark mirror (?), and in AoL he's a a...
But that 'bad energy' is personified by Demise originally and later Ganon, showing that there is "any devil or whatever". As for the 'light force', there is Hylia and the golden goddesses.
Another idea:
perhaps the sudden, high pressure movement of water caused rapid and substantial erosion across Hyrule, leading the country to largely become a basin, except for those small, untouched areas that are the mountain-islands.
Demise is the first instance of evil seen in the zelda universe, is called the source of ALL monsters (I think...?), and bears an immortal hatred that lingers forever. I think all that (and probably more) makes him the primary candidate to fill the 'Satan archetype' (meaning the embodiment and...
maybe originally various chunks of the earth were sent skyward for protection like in SS, but this time it wasn't enough to stop evil, and so the godesses decided to try and drown Ganon as well. After this the sea level ended up on the same plane as the sky islands.
?
in TP Hyrule is frequently referred to as the "world of light", which would lead one to believe that does refer to literal worlds of light and shadow. As for the "world of shadow", i think it is Termina, since (like light relative to shadow) it is a world that is parellel and in ways opposite...
i remember in TP the twilight realm is described as a realm between the worlds of light and shadow, so i believe the "gap between dimensions" is the twilight realm.
in the minish cap ur quest begins in hyrule castle, where u r are comissioned to repair the picori blade. at the end of game you return to hyrule castle where you transform the sword into its ideal form -- the four sword (its also the final dungeon). hyrlue castle comes full circle a lot, it seems.
this is probable
the Kikwi could also become the Deku Scrubs due to their close physical resemblance (e.g. plant/animal-ness, one-section bodies, and having sprouts coming out of their bodies)
Or perhaps both? the deku scrubs live isolated in small caves, so they could've not been part of...
i was thinking this when i played the game too! i think the waterfall that runs off skyloft filled Lake Hylia (that is until Zora's River was formed) ...