Anyway, after (over!)thinking this for a while, my interpretation of the story is that Rayman's universe "glitched" inside the narrator's computer, and transposed the characters and locations of Rayman 1 into a time during or after Rayman 2. That explains why Zaroff by then had captured Space Mama, why all the cake had putrefied, and the Pirate invasion would be responsible for the junk and toxic waste, and for the darker tone due to the destruction of the Heart. It would also explain the reference to Polokus, and if reflected in this universe, the fact that the game was a native Windows EXE instead of a DOS one. In fact, if Rayman was suddenly transported in time, he wouldn't have been able to stop the Pirate invasion when he did, so it's possible it's in a much more advanced stage by the time all this happens.
I guess it doesn't explain why about half the characters seem to be on drugs (as pointed out by a comment on the above YouTube video) – maybe the implication is that they were on drugs in Rayman 1, but should have been rehabilitated before Rayman 2!
I wish THEdragon were still here so she could confirm or refute my theory.








