You can't emulate the Odyssey, there's no CPU or code to run. Best you can do is simulate the logic blocks and circuitry, which is what the only current simulator does. The Odyssey is a discrete logic state machine, just as all pre-CPU arcade games were as well. The "game" itself is done directly through circuitry that represents different aspects of the game. (I.E. in PONG you have a circuit that generates a paddle, another for the ball, another to change the direction of the ball, etc.) The current state of any input device (such as the paddles) changes settings which effects the overall "state" of the entire circuit and how all the parts interact as a whole. In the case of PONG again, it effects the motion circuitry of the paddle.
With the Odyssey you have the need to play multiple games in this format, rather than just a single game as in the arcade. So the multiple games were each designed separately (see Ralph's site or book for more info) and then eventually put together with common logic circuitry "blocks". Each of these blocks reside on a circuit card inside the Odssey, and interact with each other via the circuit set up with the jumper cards.
As for new games, you have to use the logic that's already built in to the console. That's what was done for the previous homebrew
Oddball. Most of the game play for Odyssey games were based on the overlays and imaginary "rules" anyways, sort of like a board game. The logic inside just throws up different objects on the screen and changes their behavior and control.