Correct me if im wrong but my guess is half the people don't quite know what there talking about. First mistake is believing that the Aurora Borealis is exclusive to Earth which it is not, second, thinking it can't be on the planet Nirn because its not Earth, to clear it all up...
"Auroras are caused by radiation from the sun, called solar wind, interacting with Earth's magnetic field. Since the magnetic field is strongest near the poles, that's the region where most auroras occur. Solar charged particles from the sun, which are normally radiated into space, sometimes get caught in the Earths magnetic field as they come into the upper atmosphere they react with other gases and produce coloured lights"
See, right there is where it's wrong. The sun for Nirn is not a giant ball of fire, it's literally a hole in the universe, a gate to the realm of magicka called Aetherius. The stars are just smaller gates.
The problem is assuming that Nirn and Earth are the same things under the same universal laws. They're not. Superficially, they appear to be the same. Deep down, they're nothing alike.