They weren't completely roleplaying. Many of the events in the game actually happened (along with Corey and Kiki, also Sigmund's electroconvulsive therapy and Amaria's memory loss, though in the real Amaria's case it was caused by a car accident).
I asked Ame about this before and I forget her exact answer, but she did say at one point she felt like she was disrespecting their memory.
They also didn't design Pokemon Reborn if you're thinking of the game. Reborn was originally an online battling league. The game wasn't originally planned. Someone decided to make one, and since Ame had experience in RPG Maker she decided to do one too. She expected to get bored around the second episode but didn't, so it kept going. Most of the real people who were the leaders in the online league aren't around anymore and either haven't played the game or don't know there's a game to begin with.
also re: Cain. He's pan, not gay. Like the other characters his personality, history, and actions in the online league were the same as in the game. Ingame Cain sings a lot, and in the online league he'd link tracks as background music for his battles. He also flirted with challengers similar to some of the comments he makes in the game.