
It depends how mod is made. If it depends on a base content of a game, it’s generally a mod for that game. That’s what Counter-Strike and DOTA for example was at first (they required Half-Life, and Warcraft 3 base files respectively).
If you make a game for a specific engine, it’s generally considered as a standalone game, not a mod. Also in olden days code for the engine and the game wasn’t separated so you couldn’t easily reuse the game engine. AFAIK Id Software was one of the first companies that made reusable game engines that were also licensed to other companies, and even made map editor available for free.
Pokemon MMO’s are the entire different thing. I am not 100% sure how they developed them, but they seem to be just reimplementations of original game mechanics, but while reusing original assets.
And yet I don’t understand why you say they are not taken down by Nintendo. Couple of them were already closed down because of copyright infringement, and they made big news about that.
They will eventually be all taken down. That’s the point. They have no legal framework to exist, and Nintendo could strike any time they want, like Rockstar did with the re3 project.
They also have valid reasons to think that these projects are causing them to lose money, since they give alternative (and technically better) solutions to play their old games, without buying any Nintendo hardware or software (unless you dump your games, but let’s be honest. You don’t).
No one says that the actual source code (C or whatever) is “piped out”. The machine instructions (in form of a binary) you have before decompiling is the code that is executed by the machine/emulator is copyrighted like any other data on the disc/cartridge. You are not writing the game yourself if you are decompiling it. And it’s logically a derivative work. The fact that the resulting “instructions” is not the source code that developers wrote is as expected. It won’t create it from thin air.
I don’t understand what kind of mental gymnastics you need to do to think that you are doing something original here.

I really dislike any game with difficulty scaling. It might make some sense, if you fight random bandits in the middle of nowhere, since they had time to level up a little, but in most places it’s just annoying.
I’d rather have my character level up and be able to literally destroy everything with one hit when I spend a shit-ton of time making it stronger. See: Gothic games or classic RPG’s.

There’s nothing new in this article. And I don’t think Nintendo ever said that emulation is illegal, just emulating their games is, which technically is true to some part at least in the United States, where sometimes you need to circumvent some security measures to get games emulated which is a forbidden (this is mentioned in the article).

I’ve just finished playing Half-Life (or in fact, the fan-made remake Black Mesa), and Half-Life: Uplink (the demo version that was released after the final game, and it consisted of a short non-canon scenario that’s not included in the final game, but lately was included in the 25th anniversary version).
I will be playing HL: Opposing Force and Blue Shift next. And in general I am planning to fish every Half-Life game this month (except Alyx since I don’t have good enough hardware for me to enjoy it, and playing it on GTX 1060 3GB is not enjoyable at all), and if it goes well Portal games as well.
Looks pretty interesting…