I think it's very possible that Lavos is like a starfish, and would account for it being able to reproduce asexually, and would do that by seperating parts of itself into new ones that slowly grow and mature into what Lavos is.
I don't think it's entirely implausible that the Time Crash was stopped by FATE prematurly as it sensed something going horribly wrong. FATE was never really the bad guy, it was just trying to perserve itself. FATE is several times faster then humans, and possibly cut off all system power just as they lept back in time, making them miss their mark by several thousand years.
as for Chronopolis being a backup plan for lavos, it almost was. Chronopolis being there made serge exist. The Frozen Flame probably knew of Balthasar's plan and was attempting to use it against him. Serge might veyr well have been the thing that would have prevented Chrono and co. from destroying Lavos, or at least sustaining the Chronopolis loop for the amount of time it would take for the flame to grow and mature to a full grown being, and burrow into the area beneath Chronopolis and eventually unleash all hell. This would make perfect sense if Lavos is truely like a starfish. It would be a long shot, though.