1000 people!? Geez...I know GTA5 is a big game, but that's just so many people. 

They're not saying they will use Unreal engine, they're saying that they've made their own dev kits that are similar to the unreal engine.

You don't seem to know what an engine is or does.

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

You're basically saying that everything that is built with the same screwdriver looks the same. A game engine is nothing more than a toolset that gives you the necessary tools to make a complete game. It does not include any kind of visual assets or is confined to specific genres.

Yup.  They even said it was a "requirement" to have that many people working on a game.  Rockstar could not have made GTA5 at all with a staff of 300 people.

http://www.gamespot.com/articles/rockstar-more-than-1000-people-made-gtav/1100-6415330/

They can't make their own while using others as well?
If it means we get more 3rd party support in addition to the usual 1st Party Nintendo games that we've grown accustomed to, I say great!

Nintendo Switch has less exotic hardware this time around, thus there is less of a need to build up specialized game engines to take advantage of the exotic hardware nuances to extract every possible ounce of performance and thus graphics.

Zelda: Breath of the Wild isn't going to be the best looking game on Switch, it's a game built originally for the Wii U, so it makes sense they would continue to run with the current engine they set out with, less they blow out development time and costs of course.

The fact that Switch supports Unreal Engine is a good thing although it's use has started to decline in recent years, EA for example uses Frostbite for everything, which sadly doesn't have Switch support. I don't think it even has support for ARM? (I could be wrong on that.)

With that said, I would rather Nintendo have taken the EA approach and built a team of engine developers to build one game engine to rule them all, one game engine to find them, One game engine to bring them all and in the darkness bind them... Then they could have licensed that out to all Switch developers and optimize for the hardware to the highest possible degree.

Grand Theft Autio 5 was developed for 5 different platforms, Xbox 360, Xbox One, Playstation 3, Playstation 4 and PC.
Breath of the Wild is only being developed for two platforms, Wii U and Switch.

Grand Theft Autio 5 also underwent significant development even after release.

Interesting. Remains to be seen if this is just a classical empty buisness statement or more.
As someone who is working with UE 4 regularly I can personally attest that it is a very good development tool, though not without its flaws, the difficulty spike to go from "using" to actually "mastering" it being one of them.
One of the reasons Zelda (and oh so many other Wii U Games) needed that much time was the fact that, like many Japanese Developers, Nintendo usually uses their own engines, often creating new ones for every game. Add in the jump to HD, more realistic physics, etc... and you see why we had so many goddamn software droughts.

And suddenly we are here, with several Nintendo Games using the Unity 3D Engine (Pokemon Go & Super Mario run) and talk about using Unreal.

Yes, currently its only two mobile titles, but it is a first sign of Nintendo stopping their thickheaded mentality of never using anything not invented by themselves, and opening up to the idea that other people can have good ideas as well.

Will we suddenly get big, AAA, first party Nintendo IPs made with Unreal?
Unlikely for now, but the shift towards Unreal, Unity and other Third-Party Tools and Engines as a way to accelerate development is welcome news indeed!

Even if we never get such games: If they learn from those Engines and tools to improve their own and the ones that they are giving out to third parties developing for their platforms it could already make it much easier to port stuff to the Switch and whatever comes after! Unreal and especially Unity are quite easy to use, even for inexperienced developers, in the hands of people that know their stuff, both engines are extremely powerful. If Nintendo can emulate even some of those qualities in their own tools it could be an immense step forward.