I have a quick question. Would this extension create a corresponding File:* page for a youtube link so I can start using that File:* to create gallery of thumbnails etc using MediaWIki's usual media/files related features?
Topic on Extension talk:EmbedVideo
Nope. A feature like that would be useful, though (I've had a few times I've missed it while working on a wiki). Wikia/FANDOM's video tool does have that feature, though I don't know where in their codebase you'd have to look to see how it's implemented (and it's anyone's guess how much work it'd be to port that functionality to be usable on a vanilla installation).