We seem to differ on how much weight we give the history surrounding the release of the games especially before OoT. I think the games were originally conceived as closely connected, but since the connections were never made fully explicit
Wrong. The original box and the strategy guide for ALTTP specifically called Link and Zelda in ALTTP the ancesters of the previous Link and Zelda. Since the only Link and Zelda around at the time were the ones from LoZ/AoL then it's obvious that ALTTP is talking about LoZ/AoL Link and Zelda.
Now, Miyamoto completely contradicts what the box and strategy guide say by saying that ALTTP takes place AFTER LoZ/AoL which would make ALTTP Link and Zelda descendants, not ancestors.
Regardless of which order is correct, it was made perfectly clear that the games go together. Regardless of games going in between based on new games created, it WAS made fully explicit that there was some sort of connection, whether it be a prequel or sequel connection, it was made clear that there is a connection.
First, The complete lack of a master sword in LoZ/AoL suggests a division and while I agree that the placement of the master sword in TP is a clear link to ALttP, it is notable that
In the end of ALTTP when you put the Master Sword back in the pedestal it is stated that the Master Sword would rest there forever. The fact that it wouldn't show up later on in LoZ/AoL only makes that statement work even more. Every game I put after ALTTP on my timeline doesn't feature the Master Sword, thus the fact that it is stated to rest in its pedestal forever holds true. The lack of Master Sword in LoZ/AoL doesn't seperate the games at all. It just continues the final statement made about the Master Sword in ALTTP.
a) the towns in AoL are named after the sages in OoT, and they are only sages in the AT.
Just because they are only sages in the AT does not mean that no one on the CT can know about them. We know that after Link was sent back to his childhood in OoT he tells Zelda about his adventure. I'm sure he went to great detail, even about the sages that helped him throughout his journey. This legend about the sages from a different time (the future) could have been passed down through the ages, thus causing towns to be named after these legendary figures.
b) the GBA rerelease of AoL renames Barba Volvagia which I take as an obvious attempt to strenthen the ties between AoL and OoT. It is notable that Volvagia is only awakened in the AT. He is destroyed -- it is true -- but the Zelda series is full of defeated enemies that come back.
You're right, the Zelda series is full of defeated enemies that always come back. That's the very reason why this is not a good point to make. Who says there can only be one Volvagia? If he exists in the adult part of OoT then he had to be around somewhere in the child part of OoT. We have no idea what is origins are in OoT so for all you know he could have been in that dungeon long before Link was even born. Also, the fact that there are other recurring villains that have been defeated in the past kind of shoots down a lot of credibility behind the continuity of lesser enemies. By lesser enemies I mean not main antagonists.
c) the post flood era after WW provides the only reasonable time to squeeze in the AoL backstory
The only reasonable time to squeeze the AoL BS in is just before AoL. The BS of AoL says nothing about Zelda being immortal. It only says she was put into a deep sleep. This could easily mean that she still ages like a normal human/Hylian. If she still ages normally then it's impossible for the BS of AoL to take place too long before AoL, especially since AoL is a direct sequel to LoZ. Based on that, Zelda in AoL has to be the same as Zelda in LoZ because there has never been more than one Zelda in a game. The only thing that makes sense is that the AoL BS takes place shortly before AoL.
I think it's clear that AoL takes place shortly after its own BS. This would make it impossible for the BS to take place between WW and OoT because WW makes it clear that there was no Link (and it doesn't mention any Zelda) between the two titles.
The way I see it, the AoL BS takes place shortly after LoZ so the BS doesn't really affect LoZ/AoL's placement on the timeline.