Level transitions were only introduced in the second half of the game, with the first half making you question what's really going on.
I think a more appropriate level should go like this:
Emerald Hill > (transition deeper through the island's forests and mountains) Aquatic Ruin
Aquatic Ruin > (transition into the mountain caves) Mystic Cave
Mystic Cave > (transition up and out onto mountain peaks) Hill Top Zone
Hill Top Zone > (transition down the mountains towards nearby cities) Casino Night
Casion Night > (continue through the cities to a more industrialized area) Chemical Plant
Chemical Plant > (reach the shores of the industrialized cities) Oil Ocean
Oil Ocean > (transition into Eggman's metropolis) Metropolis
Metropolis > Sky Chase > Wing Fortress > Death Egg.
The Hill Top > Casino Night > Chemical Plant > Oil Ocean level order makes a lot of sense in that they give a day-time/night-time progression with Oil Ocean giving a finishing touch with a sun rise.
Y'know, you just posted the EXACT level order I used for Sonic: The Lost Land 2. Don't believe me? Download it and test it out. :P It's been that way for ages, and even a guy on YouTube, after seeing someone's Let's Play, commented on the excellent choice of level order.
Wow, I guess great minds do think alike. :P I saw The Lost Land 2 but never got to try it out. But I just played through it and I have to say (besides how awesome your hack is) the level order is just perfect.
Someone should make a hack with the level order rearranged to this, but that being the only alteration to the original game.