No, it's not.
It's a true sequel to Mortal Kombat 1-3.
Yes. In fact, it's the sequel to Armageddon. Apparently, Raiden and Shao Kahn were the final two standing, with Shao Kahn about to kill Raiden. Then Raiden uses the last of his power (2nd time after events in Deception) to warn the Raiden of the MK1 days.
It's gotta be fun for Boon and crew to be able to tell the original MK story the way they wanted to tell all those years ago.