Super Mario Galaxy 2/WMG

The game's plot is not the result of Negative Continuity
At the end of the first Mario Galaxy, Rosalina and her Lumas managed to save the universe, basically by creating a Big Crunch and rebuilding the entire thing from scratch. Mario and most of the characters he encountered in his quest are "reanimated" in a freshly-created Mushroom Kingdom, itself part of a grand, unified Galaxy. However, Super Mario Galaxy 2 can't be a direct sequel to this, since the Star Festival happens once in a hundred years, and Mario is still kicking around, not a day older. So, the game is set in an alternate universe concurrent with the events of the first game, to be "merged" into a single timeline following the events of the second game. In other words, yes, Super Mario freakin' Bros now has a split timeline theory.
 * Maybe the "reanimation" reset the Mushroom Kingdom to a point in time before the Star Festival would normally occur... or the Star Festival is a multi-day event and Super Mario Galaxy 2 is set during the day after the first game.
 * That means Bowser really managed to get his act together this time... two attempted galactic empires in one day? Dude doesn't mess around.

The first and second game are an Alternate Continuity to each other; the first half of Galaxy is now Ret-Gone.
To expand on the above theory, the two games are part of a Zelda-esque Split Timeline. The Gainax Ending of Timeline A (Galaxy) sent Mario back in time to just before the Star Festival, which is where the continuity branched off into Timeline B (Galaxy 2). However, doing so removed Mario from Timeline A, thus preventing him from defeating Bowser-- to prevent a Temporal Paradox, someone was sent to do it for him: Luigi. He was also sent back in time, but instead to a point early on in Timeline A, taking Mario's place (while keeping the previous Luigi where he was, which accounts for the two of them). While Luigi was (re-)collecting the Timeline A Stars, Mario went on his merry way, collecting all of the Timeline B Stars (and encountering Luigi-B and Toad Brigade-B, among others). The first game's Grand Finale Galaxy is the result of the timeline being fused back together.
 * To sum it up: Galaxy (Mario) = Ret Gone; Galaxy (Luigi) = Canon; Galaxy 2 = Alternate Timeline, also Canon
 * So that's why Luigi can meet himself in the first game! Brilliant!
 * If I understand correctly, The Luigi you play as in the first game is actually from the timeline after finishing the first game as Mario? This makes for some Fridge Brilliance. Plus explaining why you don't do the Star Festival part as Luigi. The developers of the game didn't want to spoil Mario suddenly "disappearing" as he goes over to the other timeline!

The orange Luma that is controlled by player 2 is an Orange Lantern
Think about it: the Luma glows bright orange, it can't be hurt, and it has an insatiable greed, allowing it to pick up any and every item and hold them indefinitely. Clearly the Luma is trying to fuel its greed and will eventually lead Mario to Larfleeze, where he will be turned into a corps member himself.

The game is still a sequel to the first, but the Negative Continuity is because nobody remembers the first game
When the universe was rebuilt at the end of the first game, time was essentially reset, so this is one of the few in-universe justifications for Negative Continuity.
 * When you unlock Luigi in Super Mario Galaxy 2, he knows how to spin, and is much braver than the first game, suggesting the alternate continuity theory above.
 * When you unlock Luigi in Super Mario Galaxy 2, he knows how to spin, and is much braver than the first game, suggesting the alternate continuity theory above.

Super Mario Galaxy 2 is a retelling of Super Mario Galaxy.
As shown by,. As it turns out,. This theory posits that the universe was NOT reset in the ending of Super Mario Galaxy, nor was an Alternate Timeline created, but that it was simply. Supplements to this theory: Supplement 1) This allows for the possibility that Super Mario Galaxy 2 is set far in the future, with . Supplement 2) Another possibility is that.
 * Well, Rosalina is Crystal Dragon Jesus. The games are pretty unsubtle about that...

Whomp's Fortress is a painting of the Throwback Galaxy
Someone had gone to the TBG before Mario and painted a picture of it. By leaping through the canvas in Super Mario 64, he was literally transported there, one of the few stages in the game that conspiciously are just a landmass floating in the middle of nowhere; that's why the pink Bob-Omb recognized him. Alternately, he was just in some sort of "painting world" separate from reality, explaining why the Whomp King says the same thing, line-by-line, in both games; the real McCoy hadn't met Mario yet.
 * If we continue this line of reasoning further, there's a galaxy for every level in 64. If there's ever a Galaxy 3, perhaps we could see Bob-omb Battlefield or the Lethal Lava Land.
 * Alternatively, not every level has a galaxy, but every level is based off of some location in the universe. Bob-omb Battlefield could easily be an actual location in the Mushroom Kingdom.

The game is a direct sequel to the original, and it follows from the Grand Finale Galaxy of the previous game.
Bowser just couldn't give a break for even 2 seconds.


 * It wouldn't be the first time.

In the end, Rosalina is introducing herself to Peach.
Notice how Peach has never actually met Rosalina before.

Rosalina, a disguised shroob princess
The first notes in the shares the melody of the first few notes in the Storybook song (from the 1st game, but also appears in this game). So perhaps Rosalina is really

Mario and co are immortal, and Galaxy 2 is simply 100 years after the first.
Or they're just very long-lived and age slowly, since Rosalina seems to have come from the same world as well and is at least several centuries old. All of Mario's adventures / Bowser's plots might have taken place over the course of hundreds, or even thousands of years, with many years in-between each one.
 * Or the Mushroom Planet just has really short years. You know, that would explain a lot of the geography to an extent.
 * Well, most of the main characters are "Star Children", and how many crazy prophecies have Mario, Luigi, Peach, and Bowser gotten themselves into that involved ultimate power, that they've each touched at least one of the artifacts, Bowser and Luigi even using them on themselves? Actually, come to think of it, it seems that Rosalina is immortal, or at last VERY slow aging, from simply being near power stars... Mario and co. have power stars permanently inside themselves.
 * Supporting this are the Mario Tennis and Mario Golf portable titles: There is a timeskip between the GBC and GBA games where most characters have noticeably aged, but Mario's group hasn't changed a day.

How Luigi got up there.
Okay, this might be a little crazy, but think about it a bit. When you first meet Luigi, he says "I had to hustle to get up here" which means that he had a hard time. He has no mode of transportation with him. Very soon after, Lubba will mention "Your brother seems really proud of how high he can jump." ... You know what I'm thinking, don't you? That Luigi got there by jumping from planet to planet, galaxy to galaxy from the Mushroom Planet. It seems ridiculous, but Luigi has revealed on a few occasions that he jumps even higher than he normally shows, once even jumping high enough that a ton of dust is kicked from the ground and sucked after him because of the low air resistance.

The Hell Valley Sky Trees are The Anti-Spiral.
And he/they are specifically observing Mario as a potential serious threat, given how he's shown repeated usage of Spiral Power abilities; increasing his body mass instantaneously (Super/Mega Mushrooms), altering his physical composition to give himself unnatural abilities (Fire Flowers, Ice Flowers, The Metal Cap), and at one point even being able to alter the dimensional orientation of space at will. Compare the two: Hell Valley Sky Trees and The Anti-Spiral. Extrapolating from this:

Rosalina, and all her Lumas, are (or were) all Elite Spiral Warriors.
Rosalina is really, really, really old, but kept looking youthful by her vast reserves of...Spiral Energy; she only appears to lack hot-bloodedness she's overpowered and slightly lazy (compare: Lordgenome On His Throne and she'd rather let Mario do the work. The Lumas are living beings that regularly explode into galaxies, which is exactly what the Anti-Spiral stated would occur during the Spiral Nemesis, and Mario's Luma gives him the ability to attack by spinning. Finally, the top of Rosalina's Observatory spins like a drill when it flies, and THEIRS IS THE DRILL THAT CREATES THE HEAVENS!!
 * Tengen Toppa Comet Observatory? FUCK. YES.

The Hell Valley Sky Trees are Endermen.
They're black, humanoid creatures with blank eyes. Look similar?

Rosalina is dead
That's why Rosalina looks so young but is still able to survive the hundred year gap between visits to the Mushroom World. In the first game she says she always looks forward to passing by it, which indicates that she's survived enough time to pass it multiple times, making her multiple centuries old. And if Boos have taught us anything it shows that death isn't a permanent departure from the living. And it would explain her ability to float. Perhaps a diet consisting entirely of Star Bits can't sustain human life forever...
 * Either that or she's outright immortal. That would also explain how she still looks like a young woman despite living through hundred year gaps like that.