He is the father of many gods, but certainly not all, and he is not the creator of the Norse universe.
Is this epithet merely an honorific, referencing Odin's status as patriarch, or are there other meanings?
Snorri Sturluson comments on this in the Gylfaginning (emphasis mine):
9. Then said Ganglere: Much had been done, it seemed to me, when heaven and earth were made, when sun and moon were set in their places, and when days were marked out; but whence came the people who inhabit the world? Har answered as follows: As Bor's sons went along the sea-strand, they found two trees. These trees they took up and made men of them. The first gave them spirit and life; the second endowed them with reason and power of motion; and the third gave them form, speech, hearing and eyesight. They gave them clothes and names; the man they called Ask, and the woman Embla. From them all mankind is descended, and a dwelling-place was given them under Midgard. In the next place, the sons of Bor made for themselves in the middle of the world a burg, which is called Asgard, and which we call Troy. There dwelt the gods and their race, and thence were wrought many tidings and adventures, both on earth and in the sky. In Asgard is a place called Hlidskjalf, and when Odin seated himself there in the high-seat, he saw over the whole world, and what every man was doing, and he knew all things that he saw. His wife hight Frigg, and she was the daughter of Fjorgvin, and from their offspring are descended the race that we call asas, who inhabited Asgard the old and the realms that lie about it, and all that race are known to be gods. And for this reason Odin is called Alfather, that he is the father of all gods and men, and of all things that were made by him and by his might. Jord (earth) was his daughter and his wife; with her he begat his first son, and that is Asa-Thor. To him was given force and strength, whereby he conquers all things quick.
Prose Edda/Gylfaginning. (2016, February 8). In Wikisource . Retrieved 09:06, January 20, 2017, from https://en.wikisource.org/w/index.php?title=Prose_Edda/Gylfaginning&oldid=6105167
Earlier on, Har (yet another manifestation of Odin) informs us that the epithet is Odin's name in the language of the gods, and thus the first in the very long line of his names (emphasis mine):
3. Ganglere then made the following question: Who is the highest and oldest of all the gods? Made answer Har: Alfather he is called in our tongue, but in Asgard of old he had twelve names. The first is Alfather, the second is Herran or Herjan, the third Nikar or Hnikar, the fourth Nikuz or Hnikud, the fifth Fjolner, the sixth Oske, the seventh Ome, the eighth Biflide or Biflinde, the ninth Svidar, the tenth Svidrer, the eleventh Vidrer, the twelfth Jalg or Jalk. Ganglere asks again: Where is this god? What can he do? What mighty works has he accomplished? Answered Har: He lives from everlasting to everlasting, rules over all his realm, and governs all things, great and small. Then remarked Jafnhar: He made heaven and earth, the air and all things in them. Thride added: What is most important, he made man and gave him a spirit, which shall live, and never perish, though the body may turn to dust or burn to ashes. All who live a life of virtue shall dwell with him in Gimle or Vingolf. The wicked, on the other hand, go to Hel, and from her to Niflhel, that is, down into the ninth world. Then asked Ganglere: What was he doing before heaven and earth were made? Har gave answer: Then was he with the frost-giants.
Odin did produce a great number of sons, but he certainly didn't father every god in Norse mythology. And although he did have a hand in the creation of man, he wasn't the only god involved in it. Hoenir and Lodurr also played a role in the tale of Ask and Embla.
Why Allfather then? I think it would be a fair to assume that the epithet is more of an honorific title, emphasizing Odin's role as leader of the Aesir, patriarch of gods and men. It is the simpler answer, and the one that would be correct even if there was a deeper meaning to the name.
That said, at least four of the Aesir (Heimdallr, Hod, Tyr, Bragi) are only mentioned as sons of Odin by Snorri. Whether this is by accident or a conscious effort to emphasize Odin's role as a father figure and elevate him even further from the rest of the gods is anyone's guess. But a case could perhaps be made that Snorri's general tendency of presenting Odin as creator and omnipotent may be a sign of Christian influence. Placing Odin firmly above everyone and everything else could possibly be a step towards reconciling the Norse and Christian traditions.
Lastly, the epithet may very well be a reminder of Odin's simpler past. Tacitus records Odin worship amongst the Germanic people in the late 1st century, and for all we know Odin may have indeed been the father of all gods of a presumably far simpler Germanic pantheon.
As Yannis says, Snorri's Edda tried to make Odin father of all the gods, perhaps because of Christian influence. Another possible reason is that he wanted to present an organized pantheon like the Greek one, instead of the patchwork of local and national cults that was probably the real story.
Also, other sources give some of the gods different parents. Tyr had a giant father in the poem Hymiskvida, and according to the prologue to Snorri's Edda, Thor was Odin's ancestor, while according to a lost poem about him, which Snorri quotes says Heimdall was the son of nine mothers, with no father. (Snorri is our only source for it, ironically.)