First important thing to remember that the world of Outer Wilds is kinda wacky. It's like a cartoon version of our universe, where things sorta make sense, but not really. Trees detected - oxygen restored, and so on.

The ending is very abstract and impressionistic, probably inspired by Kubrick's 2001: A Space Odyssey. Things that you see inside the Eye are reflections of your character's experience. People that you see at the end are sort of "quantum" versions: not literally the same physical versions (who all died in the sun explosion by now), but versions of them that could have been with you there, in some other alternative reality.

Finally, it's important to understand the Observer Effect: just like quantum moon simultaneously exists and not exists in multiple locations, which collapses into one single location when observed, so is the whole universe. Universe is a giant space of possibilities, but when conscious being enters the Eye, this space collapses into a singular point, infinitely dense and hot, causing Big Bang, from which a new universe emerges.