I respect people, who are passionate about something and spend time to think and write about it. That's why I'll give you some of my time and my full attention:
you basically pull a universe with entire planets and solar systems and billions of people out of your ass every time you travel back in time because that creates a new timeline.
Yes, which is the concept of a multiverse. And I'm talking just one multiverse here. There are many. And all of the multiverses combined result in the omniverse. So creating another universe with time travel isn't even that big of a deal.
And besides that, the MK universe is more or less already part of a multiverse. During Raidens and Sub-Zeros intro dialogue they reference the Injustice universe, since they've both been there. During Raidens super move he takes his opponent into the Netherrealm. And in Injustice 1 we actually already saw two different universes, which further establishes a multiverse. And then there was even MK VS DC, where the characters came together from differnt universes.
Supposedly these characters have magic powers and why couldn't they actually create a new universe?
I know that MKF30 will get upset about my statement now, but MK characters really aren't that powerful, if we're honest. Someone like Raiden, who is held in high regard in the MK universe... would get one-shot-killed by someone like Thor from the Marvel universe. Thor is a much more powerful character, but when we talk about actual power he is still very, very, very, very, very low on the tier list.
So the question really is how powerful the Elder Gods even are. I have absolutely zero reason to believe that even an Elder God would be able to cause any harm to someone like Thor, who - again - really isn't that powerful, when you talk about universal power.
It will have one or more of the following flaws:
1. If Kronika is pissed that Shinnok lost, why didn't she turn back the time after MK4? It was exactly the same situation as today.
Because from what I can tell MK4 never happened until now. MK9 was a remake of the franchise and retold the story of the first few games. Then MKX followed and continued to tell the story. And now MK11 will finally take us in a new direction.
2. If Kronika brings fighters from the past, does that mean that there will be a period in everyone's past when they missed several days because they were teleported to the future? Or will they be brought back to the exact moment in which they were taken? If so, why will they not remember anything?
A character, who can manipulate time might be able to also manipulate ones memories after a certain point. So if she wants to send Liu Kang back and not have him remember anything from the point he had been taken, I don't see why she shouldn't be able to do that. But even if she can't do it, it's usually an universal law to not talk about your future, since that could have devastating consequences. So Liu Kang for example should not want to ask any questions on his own. In his mind he would probably just wonder why:
1. he is the ruler of the Netherrealm now,
2. he is dead,
3. and if banging Kitana, who is also dead, makes him a necrophiliac.
3. If Kronika takes them from an alternate timeline, not this one, does this mean that there are infinite timelines? Cause surely in the original timeline many lay dead after the Armageddon battle. And if there are infinite timelines, why does Kronika actually care about THIS timeline and why is it so important that in this timeline she reverses things?
Don't confuse timelines with universes. The Superman in Injustice 1+2 and also the Justice League cartoon there is a universe with a Superman, who could potentially turn into a psychopath with a twisted sense for justice. At the same time there is another universe with a completely uncorruptable Superman, who would never turn evil.
From what we can tell when it comes to MK 11 it seems that we're not talking about two different universes, where one Liu Kang could become corrupt and another one wouldn't - but we're talking about one timeline, where the same Liu Kang from the past ends up becoming corrupt. And that's something he is not all too happy with.
The interesting thing is, that it's not even his fate or destiny, since Kronika tells him that he has chosen the wrong destiny. That tells me that her power has clear limits, since he has no control over the decisions of other characters. She can only manipulate the timeline and try to push the characters in another direction, which suits her needs better. And that as well establishes Kronika as a below universal being, who is completely limited to her own universe / timeline.
4. If there are timelines from which Kronika brings the fighters from, why not bring infinite versions of fighters?
Why would she do that? What's the point of bringing 30 Liu Kangs from 30 different past days to the current timeline, when all she needs is just one Liu Kang, who at one point in his life has to make a decision, with which she is happy with? The same applies for all the other characters, who are part of her plan.
5. If she just rewinds time, then why doesn't she rewind time even further, to a point where she can actually kill Liu Kang or Kung Lao or whoever defies her as a baby?
All of that totally depends on her motives. Shinnok for example had visibly different goals than the rest of the Elder Gods. Maybe Kronika also has certain views, which differ from the rest of the Elder Gods. What if Kronika is afraid of Liu Kangs and Raidens actions causing the return of the One Being, who would again enslave the Elder Gods and start eating their life essence again?
But if she kills Liu Kang / Raiden in the past, who would stop Shao Khan then, who would conquer all of the Earthrealms - while as the lore tells us being manipulated and led by the One Being, who wants to get resurrected.
6. If these characters from the present go to the past and meet their past selves, does that mean that they have always been in the past? Then, if so, why don't they remember themselves from their own past?
I don't think that the current timeline characters will go to the past. I think that only the past characters will enter the present. But we'll have to wait and see.
However, sometimes in fiction timelines tend to readjust ones memories over time. Like for example in DC comics event "Flashpoint" Flash had travelled to the past and created another universe, in which his mother never got killed. But that had changed a lot of things to the worse, yet his brain and memories started readjusting to the new timeline. He started forgetting that he was the Flash and that only he could undo what he had done.
Well, alternate dimensions in Marvel and DC haven't aged well, they were a poor idea and the infinite part of them has already been retconned (DC has settled as far as I know on 52 universes, God knows why that number).
Eh. In my opinion some of the best stories have to do something with different timelines. Flashpoint being one example. Days of Future Past as well. Marvel has a whole line called the "What IFs", where the question is asked, what would have happened if..? The entire Marvel Ultimate Universe started off as an alternate dimension Spider-Man comic. Then there was also Old Man Logan, which is 'til this day probably one of the best Marvel comics period. Superman: Red Son? Dayum, son!
52 universes, because during DCs relaunch in 2011 they published 52 different comics. That was then woven into stories as well.
