I believe Alice isn't a descendent of Gwendolyn and Oswald as in the cutscene after the credits. We see a merchant in Titania's Alleyways speaking to an unknown traveler (the camera's perspective) who has no idea what land he hails from. However, the merchant exchanges a Valentinian Coin for whatever the traveler held before learning the traveler was a writer for a book he planned from the events he experienced in Erion (which at the very end, is shown to be the book titled "Odin Sphere"). This can be implied that his traveler possibly may be the ancestor of Alice and not Gwendolyn and Oswald as we see them naturally in the background and how one of the Valentinian Coins disappeared until Alice found it ages later in the book cover.
Yes, everyone should be dead other than Gwendolyn and Oswald but that happens on Erion. The story and prophecy never specifies that it's the world that dies, just Erion.
67.136.82.65 19:05, April 24, 2017 (UTC)Xephos049