I get what you're saying, but I don't think I entirely agree. If we live in a world where you can't tell if a picture is real or fiction, then it becomes necessary and reasonable to think of all pictures as fiction.
Granted, if your grandparents are showing you their vacation pictures from their world travels that never happened, this is a different scenario that is weird and can could happen. It’s a balance of trusting nothing you see while making a few exceptions for your family and whatnot
Being 100% convincing doesn't make it true. Not being able to tell what's true from what's fake is a self-evident problem. It means you're at risk of forming an invalid view of the world. The only safe approach would be to never believe anything, at which point we've even lost recent history. Madness lies that way.
Very few people who had the skill, time or money. I think we are now discovering that everybody wants to edit the photos, they just couldn't do it before in what they consider a reasonable amount of effort.
It's the same with this.. yes photo editing could always be done, but it's far easier now to get better results. It's accessibility changes the game
These photos ended up stuck to pages in an album to be brought out occasionally, or they were really good, in a frame placed on display. They have pictures from the 80s still out on their mantle.
Maybe once a decade they would go to a studio like at Sears and get a pro to get the whole family together. These would be edited, but also very rare.
Even the thought that they would be taking pictures for anyone else to ever see would rarely cross their minds, let alone the need to make major edits. Regular people simply didn’t have this vanity or need for approval when taking pics like the smartphone era