Well, you assume that EVERYONE was a 'zombie. Only the humans originated in that state, it would seem. The rest of the people were larger than their human counterparts, and regarded themselves as the 'normal' people, calling the humans Pygmies, and the Giants as giants. Furthermore, it is not specified how much time passed between the First Flame appearing and when the Lord Souls were found. Additionally, the Lord Souls are the most powerful objects in the Souls universe, by far. Manus, Father of the Abyss, split his soul so that his progeny could become human, and he is still an insanely powerful figure to destroy, like Gwyn. Every single Lord we see has only a fraction of the power that they once held. So, it isn't too far-fetched to believe that the Lord Souls could change one from Hollow to human, even in the smallest amount.

Makes sense. I just couldn't wrap my head over how Gwyn had knights in actual plate armor.

Yeah, I imagine that some sort of society had formed before people decided to go back to the source, to the First Flame

You're probably right. The time that actually passes in the intro cutscene always throws me for a loop.