Yeah the ending is pretty messed up. But the game still fulfilled its role of prequel well. It may give a backstory for the land, but this game shows us the first hero, the first Zelda, the source of all evil, the original resting place of the Triforce, the creation of the Master Sword, and the birth of the royal family, Hyrule, and the beginning of the Hylian race. So it may not show us the beginning of the land, but it shows us the beginning of the legend.
Also, Lanayru was dry because the original demon onslaught dryed up much of the land. That, and the people and robots who used to live there used up all of the natural resources in the area.
Well i am not so sure about the first of anything. The Legend of Zelda itself I thought came from a greedy sibling who put her to sleep. So unless this "legend" comes later (or sooner. No idea). Still there is still more to be had dealing with this.
As stated by Nintendo this game is a prequel game and NOT the first in the series. They didn't want to tie themselves down by saying this game came first because then they could not go any further back if need be.
As for where things went and why places are how they are, well that is just geography. Places change over time, things erode and/or decompose and nothing remains. Well that would be what reality says, but a lot of made up things for fantasy games and the like do take from reality in a lot of ways so that is my take on that.
As for the plant, I am not that far but based on other games trees in Zelda seem to take a while to grow, especially if there is a curse around or in play. In OoT it took 7 years for the Deku Sprout to pop up. Obviously that isn't anywhere close to how fast trees really grow. Again this is just an opinion for now, as I am not that far.
As for the time paradox thing, Link was/is on an adventure. When he returns things are changed in some ways, but he can just not be on or go on his adventure. That in itself would create the paradox. But obviously some things from the past are still going to emulate themselves in the present. in OoT Link went on an adventure, he was sent back to relive his childhood which means he didn't need to set out on one, but he still had already gone on one regardless. That is how it works.
I apologize for sounding semi-ignorant to some things as I haven't completed the game, but have read/seen enough to have some opinions of my own so far. Hopefully I am onto something and not way off here. Some things I am sure I am off on but some things have to have some validity.