When 130 mm started to be the standard spacing? There are many early-1990s frames appearing on CL over and over again which have 126 mm rear spacing. My Olmo has 130 mm and it was made in 1989 (could have been DIY, easily). How long was the period of transition and when 126 mm ceased to exist?

The answer varies from company to company, and even from model to model within the same company. The quick answer is somewhere around 1990 when 7-speed freewheels, freehubs & cassettes began appearing in large numbers. Some manufacturers began using those as early as 1985, while others waited until the mid-1990's.

6th went n+1 to 7 by making the chains thinner to fit then the 8th was added with the spacing of 7. and the rear end had to go to 130 to fit in all 8. (ususally to get the 12t cog).

Time line, above, seems adequate.