I know that Young Link is the main character of MM. I know that he goes through a portal to another world, and when I was thinking about it, it sounded very much like the portal through the Temple of Time that Link used in Ocarina of Time. And if that were the case, it seemed as though the portal could be a link to several centuries into the future. If this were the case, it would be a warning of sorts to Link: this is what the future of Hyrule is. It will flood, people will die, and it will result in a new world.
I mean, I understand that it doesn't really work, but it would explain what Termina is. It would explain why it seems so similar to Hyrule, because it really is. Just in the future.