It's not ambiguous at all really if you pay close enough attention. It's clear, actually. Link plays the Song of Time to "return" to the 1st day. Now that doesn't make much sense until you realize a few things. Not only are there not several Links running around and events being solved around...
I'm afraid there's not really basis for that, Zeldafan. We have some indication of what Termina is already, and that's an alternate dimension. We can pretty much get it that it's a traditional sort of alternate dimension from the fact that it contains alternate versions of many people. So I...