I kept a close eye on the game's Japanese release story-wise and tried the demo for the US version. The comments from the developers are perfectly accurate and this is no spinoff (if you took a look at any of the information on the game, you'd instantly know this). Most people who have actually had a go with the game agree as well. I've read several impressions that have said it may as well be called "Kingdom Hearts 3". Had the game not been on a handheld and had 3's plot not already been spoken for, it could have been called that. It's essentially a main game, similar to how BBS was internally developed as KH0.
The reason Sora and Riku appear younger was for their mark of mastery exam. Their skills are self taught and Yen Sid (the sorcerer from Fantasia) intends to have them relearn how to wield the keyblade the proper way. Their youth is a byproduct of them basically being "reset" to how they were before they began teaching themselves. But they haven't forgotten anything unlike in Chain of Memories, KH2, or even ReCoded. Only their physical appearance changed, they kept their memories. This game is the latest one in the timeline, it's a true sequel and not a prequel or a side game. It moves the plot ahead and sets the stage for KH3.
And gameplay wise, yeah BBS+KH2 on steroids is definitely a good explanation. The game uses the basic combat elements from BBS including the deck command. But KH3D mixes that up with "flowmotion", a new element that adds incredible parkour acrobatic techniques to the gameplay. It takes some of the more flashy combat elements seen in KH2 but further enhances the moves you can do. Even the worlds are designed around this as they're absolutely massive in size, far bigger than anything seen yet in the series. The platforming is back in full and the game encourages you to make the best of all the acrobatics at your disposal. There are several new worlds, and all returning worlds are completely redesigned and heavily added onto. There's no doubt this game was given the royal treatment from the developers.