RBY/GSC's world felt much more real and grounded because the player character was a kid adventuring in a clearly adult world.
There was no need for a heroic story centered around stopping an evil team exploiting legendary pokemon to end the world or something thereabout because just the challenge, the ultimate underdog story of a kid travelling in a world full of adults on a simple quest for glory was more than enough for us to stay invested.
Indeed legendary Pokemon were actually the stuff of legend back then. They were a part of the world's lore, and the opportunity to battle and capture them were rewards for exploring the world thoroughly..