I imagine it would be very easy for TSL to delve into Valanice's and Hagatha's history because, to be honest, KQ2 was just a hodgepodge of fairy tales all rolled up into one package. I'm not trying to slam the game (it was my first KQ game), but very little story existed in KQ2 to really delve into... which gives the TSL team a great deal of leg room to work with.
Keep in mind I haven't read the Companion (I am beginning to think I'm one of the few KQ fans who hasn't read that book)... but based on the game and it's manual, there is very little to go on.