Those animatronics the Phone Guy said are from the older place are not actually from the first game but are even older models. The reason they smell bad is because their very old or maybe SOMEONE has been secretly killing kids at Freddy Fazbear's Pizzeria since the beginning and that someone almost got caught in this game and that person COULD be the guy who was originally doing the day shift.
Remember, Phone Guy said that a golden Freddy suit had been stolen from the pizzeria and the animatronics where malfunctioning as if someone messed with them and the only other person we know (so far) that could of done that was either Phone Guy, the guy doing the day shift since the day shift was suddenly open or Fritz Smith who you play as in the custom night. Also, whoever stole the Golden Freddy suit must of also messed with Foxy in the original game and made him bite one of the kids. He could of also done the same to others later on.
It is also theorized that Freddy, Bonnie, Chica, and Foxy are aware of the killings and want to stop them. Since they seem to go after the security guard, its likely that a security guard killed the kids. Then there's Mike. Mike could actually be one of the five kids that was taken back behind stage and murdered but Mike got away and years later, went back to work at the pizza place as a night guard because he wanted to find answers to what happened back 87. Why else would you return to the place where your friends were killed?
And those words that flash on the screen saying IT'S ME could actually be the poor souls of the kids crying out to Mike because they know he's the one that got away and their childhood friend. And the faces flashing on the screen and Golden Freddy appearing in the room are actually both memories and hallucinations Mike encounters as he continues to come back to the place. The 7th night where you can mess with animatronics could actually be Mike trying to fix the animatronics or trying to see if there really are bodies in the animatronics.
I still don't know what Puppet Master has anything to do with this but some people are theorizing that he could of stuffed the kids (if there are) that died before the ones in the first game or the kids from the first game into the older suits because he thought it would bring them back to life or something. He gave them gifts to see if they'd wake up but nothing happened.
And then there's the guy your playing as; Jeremy Fitzgerald. I believe he has nothing to do with the murders and was just caught in between whatever was happening at Freddy Fazbear's Pizza. He was just an innocent guy trying to get some money. Remember what Phone Guy said in the first call? "Welcome to your summer job at Freddy Fazbear's Pizza.." This leads me to believe that the character your playing as is a teen or young adult. Same goes for the first game; its a summer job.