just look at it this way to make it simple: once upon a time = one time in the past and it doesn't technically mean "a long, long time ago..."..it's just that it's been known for that meaning because of how the phrase is often used in stories to describe something that took place long time ago...

I think the key part is the indefinite time. This could have happened a long time ago, or a few years ago, or even yesterday, or even never in reality. By keeping the time indefinite you don't need to stop and correlate historical information as to exactly when it happened. "Once" works as an adverb - in fact, the whole phrase is adverbial because it describes the following verb. The next part is usually, "there was..." Was? When? "Once upon a time." For "once" to work as a noun, you need articles or propositions in front to tell me that it is a noun: for once, this once, just the once... Also have a look at where the stresses fall: "ONCE uPON a TIME..." Nice rhythm, hey? :)

"Once upon a time" is the traditional beginning to a children's fairy tale

"Once upon a time" is an idiom. The meaning of an idiom is independent of the words of which it is composed. The words do not change. Neither does the meaning.

btw Once upon A Time in America is one of my favs.