I kind of doubt Satam and Adventure would have mixed if Satam did continue. Adventure came about when Sega of Japan pretty much took over SOA, and they incorporated more of their cultural interests into Sonic's 3d breakthrough. We know enough from history that SOJ didn't understand or appreciate SOA's attempts at creating the Mobian world, and they were willing to shut down every project that was tied to Satam/Archie after Sonic and Knuckles. If Satam/Mobian Sonic still continued in the mainstream franchise, I doubt Sonic Adventure would ever took place, and so many of the story ideas (Chaos, Gamma, the echidnas) probably would have been non-existent.
I dunno. "Sonic Underground" was created to promote SA1, and it took a LOT of creative liberties with the source material. Same thing happened with Archie and Fleetway, so this must've been before they enforced their control onto other regions. Had "Underground" been a revival of SatAM instead, as Hurst originally intended, I could imagine it continuing the story while utilizing elements from the games.
I doubt SatAM's continued existence would've prevented SA1 from ever happening. I mean, "Sonic CD" and S3&K were released during SatAM's airtime and they didn't hinder anything. They were different continuities and both SatAM and Archie simply adapted their material into their worlds.
I always believe the tricky part to any Sonic writing is how to correlate with SOJ and SOA. I would easily debunk a lot of the post-Sonic and Knuckles storylines because I believe they harm some of the quality of the Satam/early Archie Mobian storyline; but I can't deny that there is some good things that did come from Japan (constiancy with 7 chaos emeralds and one master emerald) and many modern Sonic fans are more familiar with Japan's concept of Sonic. So in good writing, how much correlation is needed with the two sides, and how much should one side give in?
Like what exactly? I mean, if SatAM managed to turn the goofy Dr. Eggman into the serious Dr. Robotnik, I don't see how difficult it would be to adapt other elements into the show.
Adding Knuckles is a given since many enthusiasts had been waiting for his long-expected appearance and his backstory of being the last of his kind could still translate into both SatAM and SA1's storylines. Amy shouldn't be that difficult to incorporate, considering a number of villagers living in Knothole. Same thing with Big (even though his inclusion isn't exactly necessary to the storyline).
Really, the only thing that I could see as problematic is Station Square. Since SatAM left humanity's presence vague, it would probably disrupt the mood of the show. But the final battle with Perfect Chaos still took place in a city, right? So why not have it set in Robotropolis instead? I could picture that being pretty deadly as well.
As far as trying to tie it into Satam, Chaos would either have to be separated from the Master Emerald (unless it is introduced into the storyline) or be the creation of something else. Lazaar is a good candidate, but I believe his power is limited to his own computer of spells/ I don't think there is any indication that he messed with the powerful chaos emeralds (which is pretty much a plot device in the chaos story). Maybe he did; if so, then his backstory has to be explained (like why he is the only human in Satam along with Robotnik and Snively). Chaos may work better as a agent of the environment as Mobius' polluted stated could trigger a type of spiritual being to take vengence; if we follow this route, however, Chaos would most likely not be on Robotnik's side since he is a major cause for the destruction and carnage on Mobius.
I can picture the Master Emerald acting as some sort of a mystical key or barricade that sealed Chaos away for thousands of years. Once a peaceful creature, it went berserk when its power was abused by the Echidna tribes for warfare. In a fit of rage akin to the atomic bomb, the creature became too powerful for them to control and wound up destroying them. Fortunately, a young priestess managed to seal away the creature with a powerful spell and sent its location away so that no one could free it.
I can imagine this sort of story being passed down as a legend, leading to many wannabe-warlords like Robotnik (or maybe Snively) desiring to control it and use it against their enemies. As for how they know about the legend, maybe they learned it from Naugus, or some long-forgotten data file or book?
Personally, I have my own idea for what it could be, but it wouldn't make sense chronologically-speaking.
I also would probably not attribute some of the ancient civilizations (Mauga) to the echidnas. Satam has shown that Mobius has a variety of species and cultures, so why fall back on the same argument for every special event that happens in Mobius? The echidnas can have a part with the chaos emeralds and possibly chaos, but they were only one culture, and they certainly didn't live in every geographical part of Mobius. I would encourage writers to introduce new concepts and to break away from the shallow storylines seen in the games- try to incorporate what will make a good story, not a story that pleases every Sonic fan.
I picked the Mandaras specifically because of their legacy. Apart from them being an ancient culture that mysteriously disappeared, the Mandaras also built Mayan-like structures and had powerful artifacts which grant the user(s) incredible powers. The semblance was uncanny and I thought it would make perfect sense to mash the two together.
I'm not saying they were the only ancient civilization on Mobius, but they certainly had the greatest influence in SatAM's narrative. It only made sense to me to combine the two.