The MS in the basement leads me to believe that the Temple of Time was adapted into the new castle. The lake is probably the crater from where the old castle was, filled with water from the river that ran conveniently close to town.Ah but look at the area around Hyrule Castle, Look's like Lake Hylia right? And the Castle was destroyed and was replaced by a floating island ontop of a lava pit in OoT, they couldn't of rebuilt it there, but that doesn't answer everything
Last time I saw this image, it was suggested that those rocks looked identical to the ones by Lake Hylia in OoT, and it was determined that that image did not appear in the game (we couldn't find where it came from).Now look closely at this picture to the east of Hyrule Castle.
http://www.zeldawiki.org/images/9/95/View_of_Hyrule_From_Atop_Ganon's_Tower.jpg
That looks a lot like the Bridge of Eldin, ruins and all. (or what's left of it, in this case) What do you think?[/FONT]
Yes, even if Kakariko wasn't raised in the same way as Forest Haven, it's definately the same people.
You also may or may not have noticed that the Kokiri Forest theme from OoT shows up not only in the Forest Haven theme, but also in the Outset Island theme. I think it's because Koji wanted to turn it into Link's theme, but I'd like to hear other theories about that one. Outset and Kokiri Forest are definately not the same place, nor inhabited by the same people, such as Kakariko and Windfall are.