As long as SW is regularly bought, emulation is not just legally fine, but the best way to allow users to enjoy the game licenses they bought even after HW they originally ran on isn't supported anymore, and often to run at better resolutions and framerates than on original HW.
Piracy is bad, but there isn't a biunivocal relationship between it and emulation, and most often pirates don't like piracy through emulation, as they almost always want to pirate the latest games, and when games are new, emulation, if even already possible at all, is horribly slower and buggier than running cracked SW on original modded HW.

You can't always preserve a console.

Older consoles had liquid filled capacitors which are prone to leaking/bulging/failure. The clock-gen capacitor issue on the original Xbox being a prime example.

Early CD-Rom based consoles have solid-state lasers in their optical drives which do degrade and fail over time.

Power supply units, fans, mechanical drives can all fail.

Carts with battery save backup can have the battery fail, sometimes the acid can leak and cause damage to the electronics.

Some optical Disks, especially in the CD era were prone to Oxidisation of the reflective layer, otherwise known as Disk rot. It only takes a tiny flaw in the manufacturing process or a slight bending of the disk when removing it from it's case to start the process.

The same issue can occur with DVD, but it's less common.

What are your views on emulation?
Emulation exists both as something I used, and may use the future, it exists to service a need to do things quickly when needed in my eyes.

What benefits does emulation provide?
Honestly Piracy, people can act like playing games more detailed, but piracy is the key benefit.

Does it impact game sales?
Yes, I honestly believe so, since I am myself literally skipped GBA (Otherwise I would have bought it), because of emulation. Just like many people who are waiting and paying for CEMU development are not going to buy Wii U or Zelda.

How do game creators feel about this?
They hate it, evidence has shown that many large companies hate modding a console and emulation, some indies are bit nicer about it, but why would someone want their work treated for free.

What are the legalities and ethics around emulation?
If it is without the ownership of the software it is illegal, I do know backup something is considered legal. However the sharing of said backup is illegal (see court trails). Morally it gets a bit grey, because some games are harder to find, and etc, however large percentage I imagine are using it illegally. (However like jay-walking, if it isn't actively targeted people will not treat it like a crime.)

What percentage of those that use emulators are engaged in privacy?
I imagine the percentage of people who have used emulation 100% morally correct is somewhere between 1-5% of people using emulators. That means they have never pirated single game they didn't own.

Are there sources of data to support this?
Sadly don't think any study has been done on number of legal piracy.

(1) Emulation is great. It brings us Virtual Console, let's relive old experiences and keeps old games alive. See (2) for more. To clear things up: emulation is just a technology.

"In computing, an emulator is hardware or software that enables one computer system (called the host) to behave like another computer system (called the guest)."

https://en.wikipedia.org/wiki/Emulator

For video games it is important, as it allows to emulate a hardware you don't own, that you cannot connect anymore (old consoles don't support HDMI for example), that is broken or otherwise unusable. Also it may enhance the gaming experience, although that is not the core of an emulator.

(2) The benefits are multiple. Most of all, it allows to broaden the reach of software (in out case the software in question are games).  To speak in console terms: an emulator increases the userbase.

Emulators are important to develop software for a hardware that poses difficulties to develop directly on it. Most Android developers use an emulator for instance. And devkits for console development often involve emulators, as you cannot bring up an development environment or compilers on a console. So emulators help develop the games (a process which would be otherwise a real pain in the ass).

Emulator keep old games alive. Old system often aren't possible to practically use. A simple but effective reason is the missing HDMI adapter, you would need an old TV to run the game too. Also your old device may be broken and rob you this way of experiencing the game again.

Emulators are needed for archiving games to illustrate gaming history.

Emulators can be used to enhance the lifetime of a game, think about the emulators helping to still play Mario Kart Wii online.

Emulators can help to enhance the gaming experience. That can be graphical advancement (higher resolution or framerates), technical advancements (like the emulated Pokemon games on 3DS allow access to Pokemon Bank), the ability to mod the game or add stuff that was technical impossible back then (as Virtual Console add the ability to save the game anytime).

(3) Well, I have no numbers here, so I talk out of my ass, like probably most here. There are two possible impacts: people use the emulator as a tool to pirate a game or they use it as a tool to play a game they haven't the platform to play. In the both cases there are two possibilities: the person would have bought the game if he/she wouldn't had the opportunity to emulate, or the person would have ignored the game. So, the pirate who would have ignored the game otherwise is no lost sale, but the pirate who would have bought the game otherwise is. The player on another platform who would have ignored the game is a sale won, but not if he would've bought the game in any case.

Well now, if we are serious, someone who pirates games has an abundance of games to chose from. So any games he isn't able to play probably don't do much difference. Only a few pirates who REALLY want to play a certain game would've bought it otherwise. So lost game sales are low. Similar with the second group. Mostly this will be people who already bought and played the game on the original platform and want to play it on after the platform is unusable or want to enhance their gaming experience. Only a few play a game they wouldn't have otherwise. So not much won sales too.

There is a BIG, BIG exception. Official emulation. Virtual console, original Xbox-games on XB1, emulated games on playstation, NES mini (which is an emulator by the way) all consist of won sales.

So overall, the inofficial emulating probably has neglectable impact, the official emulating brings in additional sales. So overall the sales of the games increase.

(4) Well, depending on the circumstances, the personality of the game creator, the game. If it is seen as a tool to piracy they will be against it, if it is used for extra sales in for instance Virtual Console it will be seen as a boon. But there are probably game creators who oppose it as principle (and wihthold their games from stuff like Virtual Console) or are open to it and sell their game free of DRM to begin with (CD Project Red for instance).

(5) Complicated. While legality and ethics worldwide is clear about murder and thieving, the issues around emulating are complicated. Even the more clear-cut case of piracy is solved completely different under different legislations, the issue is even more muddy for emulation. Mostly emulation tends to be legal, if it isn't a tool for piracy. But, as a real court case can be more complicated, makers of emulation software can be sued under side-issues. Even for something unclear like "furthering copyright infringement".

Even if it is legal, other repression can be done. So can be makers of official software-stores (like Play Store for Android) be forced or persuaded into banning emulation software. This is no statement about legality, the store owner can decide about these bans regardless of the legal situation.

Ethics reach even a far more broad disagreement. Basically every position you can think of someone is taking.

(6) I assume you meant piracy not privacy. Again, no numbers to back it. As emulation is a niche-theme I assume the most used emulators are the official one. So the piracy-part is small.

(7) As said before not much data. I have some weak data to support the hypothesis, that official emulation is strong:

http://www.ign.com/articles/2010/02/23/wiiware-virtual-console-sales-exposed

According to this in 2009 Super Mario Bros. 3 sold 1 million times. Other virtual console titles doid sell strong too. Again, weak data, as the source for this numbers is unclear, but it points to somewhat strong sales of emulation.

I emulated xenoblade and own the 3DS version. Wanted to experience it in HD

What are your views on emulation?
Emulation of previous gen games is fantastic. Being able to take a piece of media meant for an old device that is rare or often in bad shape and use it with a PC, often with additional bells and whistles, is brilliant. I think many collectors despise emulation; I sort of consider myself a collector, but realize my Sega Genesis just doesn't work very well anymore, and emulation works just fine for those times I want to revisit a classic.

What benefits does emulation provide?
There are plenty of examples of old video games that would fade away into legend & obscurity if it weren't for emulation, and that alone should make any enthusiast less judgemental. Emulation also allows for mods, which range from fan translations & mods to completely changing the game into something else. Some of my favorite mods include a reworked Castlevania 2, which properly translates the game and aligns the timing of the text with that of the Japanese version, as well as includes a digital version of a map that was packed in with the game in Japan but nowhere else. A LoZ mod that makes the overworld map in the top left corner functional. A Metroid mod that adds modern-day conveniences like a map and sub-screen to see what you have (and can switch between collected guns).

Does it impact game sales?
As far as official sales go, I don't know. Secondary used market, don't know and don't care, "collectors" can shove off with their inflated prices. There is that saying bandied about in discussions of piracy that anyone pirating a game wouldn't have bought it in the first place. Personally, I've played a number of Japan-only titles via emulation, and tend to buy them if they do get officially released. (Final Fantasy 2-5 fit this mold, played fan translations first, then bought them all for PS1 years later when the official localizations finally happened). Still waiting for Live A Live and Terranigma to be rereleased...

Oh, I suppose one must address remasters and officially sold roms. Such rereleases should have enough modern benefits built in and a coherent pricetag to incentivize a purchase - a remaster should have nice new textures & features that one couldn't get via emulation. On the other hand, officially sold roms with DRM locking it to one specific console has distinctly fewer options, and as far as pricing goes...when Sega can put tons of Genesis games on a disk and sell it for $20, selling a single Genesis rom for about $5 is a joke.

How do game creators feel about this?
Based on what I've seen from other mediums, I am certain some creators are happy people can experience what they've made but haven't been officially available for years, while others feel jilted at not getting paid for past work.

What are the legalities and ethics around emulation?
Legalities - well, based on corporate culture, legally we don't really own any of our games, just licenses to use software on intended hardware. I wonder how folks who buy into that would feel if one of these companies just announced their licenses will now only last 90 days each. Emulating current gen games doesn't feel particularly ethical, but beyond that it gets pretty individualistic.

What percentage of those that use emulators are engaged in privacy? Are there sources of data to support this?
Technically, probably most of them. That's like asking what percentage of drivers break traffic laws on a daily basis.

1. It's good.

2. You can play games on other platforms as well. It's especially beneficial if you can't get the original platform easily anymore.

3. By itself, no. But the associated piracy probably does. For the most part, I would expect the impact on sales to be quite small though. There aren't many emulators for modern systems, which means that for the most part, only games for older platforms suffer from the associated piracy. But those games are often hard to get anyway, and they probably don't provide a lot of revenue for the rightsholders in the first place, so there's not much damage being done. Even if newer platforms have good emulators, they require relatively powerful hardware, which seriously limits the effect they can have on game sales. My guess is that we're generally talking of piracy rates of 10-20% at most, if emulating modern hardware ever becomes a huge thing. Currently, we're probably talking about much, much less.

4. It probably varies but to be honest, I don't really care. They're not entitled to their games being limited to certain platforms. If someone figures out how to create another platform to run a game, there's not much you can do about it, and in my opinion, there shouldn't be anything you can do about it. If you don't want people to emulate your hardware, make it harder to emulate (which, obviously, shoud have drawbacks as well).

5. I think my answer to 4. answers this pretty nicely. I'd like to add again that emulation and piracy are to different, albeit often associated, things. Piracy is often bad (although not as bad as people claim it is), and there's nothing wrong with emulation itself.

6. Probably a pretty big percentage. That said, the numbers could be improved by officially and properly supporting the platforms where emulators run (typically PC and mobile devices). A lot of the damage done by piracy back in the 2000s was mitigated by making getting games better in a lot of ways. Similar actions should help with emulation-related piracy.

7. Nope! I've been trying to make sense, so I'd expect most of the things I've said to be correct. I've also tried to indicate uncertainty where there is any. Feel free to counter my claims with actual data if you have any.

I was going to post a short answer because my stance is pretty simple, but your questions practically begged for more text!

What are your views on emulation?

Without emulation then thousands of games would have been lost to time, especially PC games from the 1980s and 1990s. Companies are increasingly using emulators (360 BC, Virtual Console, PS Classics, NES Mini, etc.) to bring old games to newer audiences. It's also necessary for preservation, hardware and physical media requires a lot of maintenance in order to keep them working: batteries need to be changed, cart/disc reader may need to be replaced, PSU may need to be replaced. It's a lot of work and it's not practical way for average games to enjoy old games.

What benefits does emulation provide?

Preservation and accessibility.

Does it impact game sales?

I can't tell you how much piracy affects legal distribution methods for old games. For new games, simply illegaly downloading the game onto your console (piracy) is a much bigger issue than emulation and definitely more widespread. Emulation for new games is still a work in progress, games are more or less in working order and you need a pretty good machine to run the games too (nevermind the games being optimal). By the time the mainstream starts emulating games like BotW and Persona 5, those games will already be years old, whereas pirates are currently using modded systems to play those games at console level right now.

How do game creators feel about this?

Can't speak for them.

What are the legalities and ethics around emulation?

Emulators are legal in the United States due to legal precedents set when Sony sued two emulator developers. How you obtain the games is a different matter entirely and depends on the laws of the country you live in. In my opinion, if you already own the game in some form (official emulation, physical copy, digital, etc.) or the purpose is educational then I don't think that emulating is unethical.

What percentage of those that use emulators are engaged in privacy?

Probably most of them, however it worth noting that companies behind legal emulators are also engaged in piracy.

Are there sources of data to support this?

Sony Computer Entertainment America v. Bleem 214 F.3d 1022 (2000), Sony Computer Entertainment, Inc. v. Connectix Corporation 203 F.3d 596 (2000).

Bleem and VGS were commercial emulators. Sony sued them. They lost. So, commercial emulators are allowed. That's not the grey area. The Grey area are the BIOS and the games.

Personally I don't mind emulation for past games, especially games that some may have missed back in NES/SNES/Genesis era. However, emulating games like BoTW that are new and just released just feel wrong to me. It's a new game that just got released, why are we so eager to emulate the game at this point? You want the game to succeed? Support it. Let Nintendo know this is what you want. Emulate it maybe 5 years later or something, not one or two months into its initial release. I rarely hear people trying to emulate games that just released or are still early in their release cycle. i just feel that Zelda BoTW has potential to sell similar to that of OoT or even greater and I don't think emulation really helps it. It's like your being passive-aggressive when supporting Nintendo and their products. That's just me, personally. I don't mind emulating a game like FE Geneology since it's been years since that game came out and it's Japan only. I do mind emulating a two month old game like BoTW.