When Roku explains the Avatar state he shows a montage of previous Avatars performing impressive feats of bending, with the very obvious visual implication that the Avatar state is taking the skills of the previous avatars and adding them on top of each other cumulatively.
There's no way to look at that and think "They must just all be tapping into an octopus that lives inside them"
But frankly the fact that it creates contradictions isn't really the point, the retcons and contradictions could be worth it if it added something of worth and was used to create something cool.
But Raava isn't cool, the Wan story does nothing to make the story better, all it does it remove all the mystique and mythology of the series and replace it with something dry and technical.
Raava existing does nothing except render the entire concept of the Avatar lame and mundane.