Well, I'm finially posting on this story.
I've been reading it for a bit now, and I like it, although it's kind of like reading two stories at once. It started with Keesha and Magi, but then went onto a completely different tangent about a world in which Mewtwo and Humans live together as equals... Nothing wrong with that, although the transition is kind of odd... but it's probably needed to understand the new world that Magi and Keesha have been brought into.
The possibilty of Mewtwo as a species having their own society is an interesting thought, and probably makes for more interesting variations for fanfiction, since if only one Mewtwo exists, then you don't have too many options on what you could do with it alone. Although I find this possibility a little unlikely (I lean a little more toward the "Only one Mewtwo" side of things) it's still very interesting to watch it unfold. Since Mewtwo is my favorite Pokemon, I enjoy reading any fanfiction about it, even if this one was a originally about Magikarp. ^_^
As for the debate about Mewtwo's fur, I would think that both Mew and Mewtwo have fur on their bodies. Mew was probably inspired by a cat (not as much as say Meowth or Skitty.), or something similar, and so it would most likely have fur. In Mew's Yellow version Pokedex entry, it talks about being able to see Mew's fine hair under a microscope, so it seems to have fur on it's body. Therefore, Mewtwo should have fur as well, it's just too fine to see with your eyes alone. (although, we can't test this in real life...)
I guess I said a lot of stuff... but the main point is: I like your story, and I'm waiting to see more of it!