So in the universe where the Generation System is, which is where Wars, World, Overworld and any other G Generation games take place in, is there a real world outside the Generation System? That's where the actual characters would exist, won't they?
And maybe the original characters like Code Phoenix and Aphrodia are their actual selves who entered the Generation System, or maybe they're also simulations. The same goes for the other original characters.
But for the normal Gundam characters, would their actual selves be in the real world?
I'm just a Kamen Rider passing through. You'd better remember me! - Tsukasa Kadoya, Kamen Rider Decade. PSN ID - KamenRiderShinzo
There is most likely a real world, because the Generation System is just a neural network and not "reality" itself. But what is in that real world is completely unknown. Maybe this is a universe in which all of Gundam only took place inside of a simulation, or maybe it's similar to the Black History, a record of the past. It's impossible to know if the "real" Gundam characters exist outside of it. It could even be a system that "looks in" to other universes and collects data from them, it's all just speculation and ultimately it doesn't matter, because the point is that this plot device is only a justification to explain the gameplay and not meant to be taken too seriously.
As for Aphrodia, I don't think she's a real person, because let's face it, she looks like a ****ing alien. Again, my opinion is that she's similar to a rogue AI. Her profile might say, but I'm not reading it until I beat the game, and I don't remember what her World profile said.