Well, I'm pleased it's canon, as it's the one that makes most sense to me, too.

As for Leia, why does there need to be an explanation? No-one else knew she existed, so no-one would be looking for her. As for her recollection of her mother, Leia was more than adequately vague in Jedi about what she remembers. She does actually say she doesn't really have memories, more "feelings". And that, for me, is perfectly fine. After all, it's obvious Bail Organa and her adopted mother didn't tell Leia the truth about her real parents, otherwise she'd already know. Therefore, they probably told her a sweet story about her mother dying when she was very young and they raised her as their own.

It's really not that difficult, and as much as I don't like the prequels, I don't believe there is any continuity error with Leia's "remembrance" of her mother.