Wow! People over-think a lot of things in the theorizing section. It's a nintendo game for kids. Things are set on a small scale. Skyloft is small, where's room for so many graves? If the devs are too lazy to make a proper overworld, what makes you think they are going to have a realistic-sized skyloft with the right amount of people and graves?
How I see a game like this is an interpretation of a fantasy land. There's the people, the graves, the buildings. The actual Skyloft would be much bigger, have way more people, more graves, etc. The wii couldn't handle the full Skyloft. Same with any Zelda game. Things couldn't exist as they are. It's dumbed down.
No one eats anything in
OoT. How do they live? Where are the bathrooms in any game, save for
MM and
SS?
This isn't Elder Scrolls. Those games have sources of food, lots of people, etc. Zelda isn't quite that realistic.