In regard to the reason why the Uchiha Massacre:
Since the fight between 1st Hokage and Madara, the Uchiha clan was regarded with suspicion. The Leaf village instated the Police Force to the Uchihas to show partnership between the Senju and Uchiha. However, that was just a front. The truth is the Police force is how the Hokage and the ANBU kept a close eye on the Uchiha. The Senju did not trust the Uchiha and likewise.
Around the time that Naruto was born, Madara had invaded Konoha with the intention of using the Kyuubi to destroy it. The fact that Madara could control the Nine Tails with his eyes had bred fear in the Leaf ninjas. This increased the mistrust towards the Uchiha that much more.
Itachi was a double agent. Because he was a prodigy, he was able to graduate at age 7, and be captain of ANBU at age 13. He was ordered to keep an eye on his family. His father ordered him to keep an eye on ANBU. Itachi had a choice to make: his village or his clan. Sasuke was his only mistake, only weakness. Since Itachi was 4, when the third ninja war was occuring, he was a peaceful man. He did not want innocent and well-meaning Leaf villagers to be caught in a civil war. He stopped Madara from trying to invade the Leaf again, by asking him to help destroy the Uchiha clan instead. He kept an eye on Akatsuki to make sure that Madara kept his word on not invading Leaf. All the times he had a chance to take Naruto, he chose to talk to him instead. He only went to Leaf after the Chunin Exams to let Danzo know he was still alive and well. Notice how Pein did not invade Konoha until after Itachi died. He was able to do so at anytime.
I think Madara was being dramatic when he said lover. Itachi was 13 when the Uchiha Massacre happened. Sasuke was 8, and Itachi is 5 years older than Sasuke. He also lied to Sasuke about the Kyuubi incident. He said it was a natural disaster. Remember, Madara was trying to get Sasuke on his side and to keep him from leaving Akatsuki.
In regard to Mikoto and Fugaku being Uchiha:
I think they both were. They were either distant cousins or just distantly related. We do not know how many people were in the clan, however the Uchiha compound was huge. If it was full of life before, we can guess that there were a ton of them. It is not considered incest if the couple is at least third cousins or beyond in the eyes of the law. I don't know if Kishimoto goes by that or not in his story. I did notice that all the Hyugas have Byakugan eyes, so that is where my theory is born.