Ganondorf was sealed in what they called the Evil Realm. Many people believe that the backstory of ALttP tells of this event, however I disagree. If they were to have sealed Ganondorf in the Sacred Realm at that point, they would have called it that instead of the Evil Realm. So I highly doubt that it was the Twilight Realm at all.
As far as ALttP being last on the timeline, that's really all left up to what theory you believe. So many people have different ideas that it could possibly be the last, though it wouldn't make sense considering the back of the ALttP SNES box clearly states that the game follows the adventures of the "predecessors of Link and Zelda". Which is talking about the Link and Zelda from LoZ and AoL, as those were the only other two games created at this point.
My opinion is simply that at that time, Nintendo could have either wanted to end the series, or wanted to not go any further with the Master Sword on the timeline. They could have very well been planning out Ocarina of Time towards the completion of ALttP, and of course, OoT was a prequel to all games made up until this point. According to my timeline, the quote about the Master Sword sleeping forever still holds true. My timeline has ALttP being before LoZ and AoL, which is where my timeline ends, and neither of those games use the Master Sword. So thus far, that quote is accurate by my standards, but you also have to look at the fact that it can easily be retconned at any time if they were to make another game past AoL.