I know I'm a little behind the times, but I've finally been able to see the final 6 hours courtesy of a day at my parents' with their Sky Plus box (have seen all the other episodes as well, not speaking as a total ignoramus
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The immediate thought that came to mind on the ending was that neither the island nor the flashes sideways were "real" (perhaps a better word would be "living"). The island was a testing ground - somewhere for the losties to find themselves and, metaphorically, heal themselves before they could move on. Meanwhile the flashes sideways were a form of purgatory, somewhere where their selves could "live" until allowed to move on by the island.
This explains a few things - the supernatural phenomena on the island are explicable, which they are not if the island exists in the real, living world. It also, perhaps, explains why the writers showed the submerged island in what I will call purgatory, the flashes sideways - it is to imply the link between the island and purgatory. It explains why babies could not be born on the island. Aaron was an exception due to Clare's heavy pregnancy - technically he was killed in the crash. It explains why Christian was present on the island, and why Hurley, who in life had never done anything too special, could suddenly talk to the dead.
The losties "left" the island in their different ways at the right time. Michael and Walt left when they realised how much they needed each other - they were not at the church as they were not that close to the other losties, but I'd expect that they would have left some other, similar purgatory at the time they left the island. Charlie "died" and left the island when he did something truly heroic and good for the first time in his life. He left to purgatory, where he could "wait" (as much as possible somewhere without time) for the remaining losties to join him and his eyeliner. The cabin crew "died" as soon as they got to the island. Their affairs were in order when the plane hit the ground, and they would have gone straight through purgatory.
Anyway, these are my thoughts. It's subjective, I know, but I feel that this explanation catches more (and, for me, is more satisfying) than the one which says that the losties were alive on the island throughout the show's timeline.