As you presumed then yeah a ROM hacker could probably do far better with a game engine than editing a ROM. It is usually done as a love letter to the game as it were, or maybe its community. With enough base effort you can also do a lot fairly quickly and efficiently, especially if you play to the bugs/limitations within the game (which in and of itself doing that whilst creating something you want to play is an enjoyable challenge*).
*authors, comedians, musicians, many sports, film makers will also have similar challenges. (three random word story basis, the aristocrats, many but go with simple four chords for those that fancy themselves more, basketball half court sort of thing is a good example, films have a thousand but Dogme 95 is a good start here).
I should also note that while many ROM hackers are also great programmers not all are, not to mention if you do want it for a console rather a PC or contemporary device you do have that to handle as well.
You also have the tuning of the game. I can do frame analysis and figure out jump curves for things, and repeat for everything. It is however quite annoying and most unity engine clones you see pop up on forums lack this which is why they frequently feel awful.
But yeah for most practical purposes today go find an engine or source code to another game and play with that instead.