It has always been my opinion that if Nintendo could have made Ocarina of Time cel-shaded, they would have. Although an awesome game, the graphics didn't quite stay true to its two-dimensional predecessors. I don't say this because it was 3d - no, not at all - I say this because the graphical stlye changed. I suppose if you want to reffer to it as 'cartoony,' you can go ahead and say that. However, cartoony or not, Wind-Waker stayed more true to the series as a whole.
Now, as to the 'new Hyrule,' I have a thought on that as well. In my opinion, Wind Waker was just a continuation of the future in OoT. You see, when time travel occurs, new continueum are formed. These must be caused because all time happens at the same time. So, when Link defeated Gannon while he was a late-teen, that continueum contined. However, that continueum was continued in the form of Wind Waker. In the history of WW, they say that the hero left the plane entirely, and that is because Link went back in time. Many people asume that when the history says that, it is reffering to Majora's Mask, but in MM Link comes back.
So, Wind Waker continued the continueum where Gannon was semi-defeated. Does anyone else recall that at the end of WW, it says 'The Legend of Zelda The End'? It didn't bother saying Wind Waker in there. That is because that is where the Legend of Zelda stops. At least, in that continueum. Now, they can continue the continueum where Link was just a child, and met Zelda at the end of OoT. Since Gannon was banished into a temporal plane, it removed him from all time, past and present, and so he was no longer in that continueum. Thus, a new story starting at the beginning of OoT, without Gannon.