Obsidian was straight in Infinity Inc but his girlfriend turned out to be a traitor/spy who manipulated Grundy into murdering Star Spangled Kid/Skyman, along with implied killing off Todd's step-mom Harquinn (who was later brought back having survived years later). The gay stuff was first introduced in Gerald Jones Justice League run post-Zero Hour when Nucklon and Osbidian joined the JLA. Icemaiden (Jones' obnoxioulsy vile replacement for Ice) kept calling Todd a fag because he wouldn't fuck her, all the while trying to bait Fire into admitting she was gay for Ice.
(Icemaiden ultimately got skinned alive BTW as she was THAT unpopular)
Obsidian came out in the 00s Manhunter series, which was well loved since the writer of that book LIKED Todd, unlike Geoff Johns and Gerald Jones and treated him well. The only people who complained were ironically gay fans, who pointed out that there was some serious negative implications of Todd being gay given that Geoff Johns canonized the implications from Infinity Inc that Todd was not just physically abused but also sexually abused by his monster foster father. Along with Geoff doing his damnest to try and make Osbidian a villain.
When Geoff put Todd on the JSA team post Infinite Crisis, Alex Ross (who was now cowriting the book) had a cow about Todd being gay and a compromise was made that Geoff wouldn't mention Todd being a fag in the title rather than give him a girlfriend like Alex wanted.
Williamson then put Todd through pure hell AGAIN when he took over the title because he wasn't allowed to make Todd straight, though set up the plot point in his final issues where he explicitly had Todd taunt Alan by "joking about having been turned straight" and all but outright state that Alan, who was a hardcore leftie and socialist, had issues with his son being gay and was why he preferred Jade over Todd and why he kept ignoring/shunning his son in favor of his daughter. Which carried over in the last batch of JSA issues with Alan coming to grips with his own homophobia to try and have a father/son relationship with Todd.
As for using New 52 Alan Scott to permanently replace OG Alan, it's both a means IMHO to preserve the final pre-Flashpoint JSA issue and Alan's death/character development in those final years and to salvage SOMETHING from the shit show that was Earth 2 and how they utterly dropped the ball in New 52 with Earths End, with Darkseid completely conquering/terraforming New 52 Earth 2; something that I really wish could have been followed up on given the implications of that cliffhanger/version of Darkseid.