It's disadvantageous to stick to a single Pokémon, but not all that impractical. There was once a run of Pokémon Yellow, I believe, done with just a Pidgey.
You don't need multiple high level Pokémon, it simply helps. Type coverage is the main reason - for example if your highest level Pokémon is just a Fire type and can only do Normal and Fire attacks, then you stand a hefty disadvantage against Rock types who resist all your attacks and can deal double damage. As well, Fire and Dragon types will block you completely, while Water types mostly block you and also do double damage.
Having your other Pokémon be of equal or near level as your highest helps in survivability of that other Pokémon as well. For example, a Ground type with high defense like Sandslash can help protect against the Rock types while also taking them down. This also gives you the opening to fully heal your primary Pokémon in between the assault of your opponents - it's a lot easier to keep your primary Pokémon in top shape when your supporting ones don't fall down in a single hit. At this stage, though, it probably helps to make those "assist Pokémon" simply capable of taking down foes on their own right.
It's ultimately up to the preference of the player, though. It's fairly common for people to stick solely with their starter of choice, and by sheer force of their levels take out all opposition. As long as you have good type coverage with it (for example, Charizard can use the TM to learn Earthquake to help mitigate some of the problem foes), enough of a level advantage will keep you on top.
It's lost for good. Saved games back in those days were preserved through the use of a battery right in the game pack, not stored on the gaming device itself like it is today. And when that battery dies, so does the saves with it. It's not about corruption of the save or whatnot, there just simply isn't a charge to hold that save data between sessions.
You can start a game if you want, but don't expect that save to last after you shut off your game. It will only last for as long as you have it on, then it's just a ticking time bomb and you don't know the time.
You can extend the life of your saving capacity if you were to go in and change the battery with a fresh one. I came across this tutorial to change the battery (ironically on a Pokemon cartridge). But again, it will eventually die. Don't expect it to last forever, it's still a ticking time bomb, only the timer on it is set to a time much further into the future.
Best Answer
if you want everything legitimately, you'll need to trade with someone else, it's plain and simple.
It's the same for several other pokemon, which aren't available in Red but are in Blue (or yellow).
Some pokemon also evolve only during trading.
This is to encourage people buying the other game as well (and another gameboy) this is called 1 game for the price of 2.