What happened to Aleroth? It was a small village of healers in the middle of the forest, and ~100 years latter it is a huge capital city(of what?) in the middle of some sort of water (lake perhaps ?).
I think Aleroth just got some re-done artistic rendering. It makes no sense, but it just got put in in a cooler way. Either that or you have not been in the real Aleroth in the first game but in a "Village somewhere near Aleroth".
In all cases, the new version serves as much better background for an epic RPG.
What happened to lizard people, orcs, dwarfs? There are only some explanations for Elves, not for other missing races. I WANT to see those races in projects D and E!
Damian has put a lot of orcs to work as slaves (build the fortresses). I assume most went there. The elves went into hiding.
Actually, I always considered "the other races" were simply "not around by chance" when the Dragon Knight was running around. It's a lame excuse (Larian obviously had no time to model and incorporate the other races into the comic) - but one that works nicely for me.