The kids exist, and never died in a plane crash. The entire situation was an elaborate experiment set up by aliens to learn more about the relationships between a child and a parent. After Tellie (Julianne Moore) realizes that the kids were abducted and refuses to let go of the memory of her son, the experiment is ended and the alien life form returns things to normal. Only Tellie has any recollection of this.
Thanks, Christopher G!
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