So I pulled up my Sims 2 folder to check what neighbourhood I had last played in. I set it to "arrange icons--- date modified" and I found something strange. All my neighbourhoods were "modified" at the same time on the same date when I was playing a different neighbourhood. Also, pets neighbourhoods are getting spawned at random, I must have AT LEAST 5 by now. Then I noticed a recently added "Neighbourhood Manager" package file...
Anyone have any idea what's going on?

That's the way that the game works. It opens and modifies all of the neighborhoods (and subhoods?) every time that you run the game. Terrible design, but that's the way that it is.

Where is the NeighborhoodManager.package? If it's in the Neighborhoods folder, then that's correct. If you delete it, it will regenerate. This is nothing to worry about.

You have 5 Pets neighborhoods in the same neighborhood folder? That's definitely wrong.

How do you know that they are Pets stealth subhoods? Does your neighborhood now contain 5 copies of each shipped pet and 5 copies of each Pets lot in the lot bin?

I don't know how to explain it, but I opened Sims 2 and there were 5 seperate Pet neighbourhoods, all with the same description
"Hidden Neighbourhood for the pets" I will check into the lots, but I noticed the Pet CAS families were respawned in the family box (The Critters, forgot that guy's name)

Let me see whether I understand you.

When you go into the neighborhood selection screen, you see Pleasantview, Strangetown, Veronaville, etc. plus 5 different neighborhoods which are all named "Hidden Neighbourhood for the pets"?

If so, then your Pets stealth neighborhood has been corrupted and you'll have to replace it. We can walk you through that.

If that's not what you're seeing, then please explain exactly where you see these neighborhoods, or give us a screenshot, so that we can try to figure out what went wrong.

It might also help us to understand what you were doing when this occurred the first time. Did you fool around with the installation files in Program Files? Did you rename a neighborhood folder? Were you trying to create a subhood template?

Yeah, that's what I mean. There are lots of neighbourhoods named "Pets"
As for what I was doing, I had downloaded a mod (that corrupted everyone on the lots I played and eventually corrupted the neighbourhood of which I was on, deleting the wants/fears of adults but the younger are affected too, and it eventually deleted all the characters) which didn't work.

If your Pets stealth subhood is being added as a normal neighborhood, then the most likely explanation is that your game installation has been corrupted.

Uninstalling and reinstalling is the very last step in the Game_Help:Game_Problem^wiki FAQ. You may want to follow that FAQ from beginning to end, or you may just want to skip to the end and try uninstalling Pets fully, then reinstalling. If that doesn't solve your problem, then you'll want to do the FAQ from the beginning.

This is very similar to a problem I'm having where every time I try to create a new neighborhood it turns into a stealth pet neighborhood. That's so weird, I've never heard of this problem before now.

I just found someone who shared all of the shipped neighborhood templates:
http://moreawesomethanyou.com/bastdawn/maxishoods/

So, if you haven't already reinstalled, you might just be able to delete your existing Pets stealth subhood and replace it with a downloaded version.