I remember during the "eternity" in between Gen 3 and 4 sprite-work had started becoming popular as had tilemap-work, with the common words being decolors and recolors, decolors being taking the newer sprites and remaking them for an older style, while the recolors was the opposite direction. I remember on TRSrockin, Lugia's Den, and Mewthree's Domain learning tutorials on this, and even having contests for it.
Fast forward to 2006 and people were making romhacks of Johto in Firered and Ruby, but also trying to make Hoenn in Gold, and some even so far as to try making Johto in Red. It was not perfect, but it was enjoyable. I even got into the fun of it too, having a lot of fun making romhacks. One such I remember distinctly involved a Tyranitar on the main screen, and was based in Gen 2, and was honestly phenomenal to play.
Needless to say, the difference I found in my life between the games officially made, and the fangames was that the fangames were not limited by policies of the company, and were only limited by the technology, and the passion of the creator or sometimes creators. Today we live in a modern world, with such projects as Pokemon Red KEP truly exemplifying that spirit with the limitless power of the decomp projects and community.
Sadly I lack an account for the Atlantic, but I am going to assume that they were bought out.