I think Kathryn/Abigail is the baby that Cora traded away as her first born. Once Rumpelstiltskin came back to collect on the deal, King Midas was so upset he divorced and banished Cora from his Kingdom. Cora ended up marrying Henry who as Nonnie states is likely wealthy but not royalty or nobility. And although Cora may not truly loves Henry, she probably likes the facet that she can manipulate him.