I think its real and I believe that SNES software CAN run on the GBA:
While it would be exceedingly difficult to write an emulator for the SNES on the GBA (just on a code level, not to mention what to do about scaling, filtering, buttons etc), I highly doubt it it's impossible. The DC, for example can run SNES games at full speed with no sound. I'm sure people have been working since the GBA technical docs came out for somethign to this end and the SNES is a (techincally) well documented system.
I agree, too, that it would be impossible to port a PC emulator to the GBA; one would have to write a completely new emulator that takes advantage of the GBA hardware.
As mentioned above there have been fake ems before, but if Gragga and Flubba say it's real, I'm inclined to believe them. The proof's in the pudding, but I'm willing to wait (and encourage the developer!) and see before dismissing it outright.