So, mortals go to the Dreamsleeve, which is sort of in Aetherius, and sort of not. But what strikes me is that the Dreamsleeve is said to be where mortal souls are recycled (UESP, "Lore: Aetherius"). Does that mean that the Dreamsleeve is in a metaphorical sense just a highway back to Mundus? Or does a soul stay there? For instance, is the Dreamsleeve synonymous with the ghost realm of the Dunmer Ancestors?
Wow slow down. First of all be careful with the UESP when it comes to lore. It's not as bad as it used in some places but it's still not at the point where you should just rely on it. It's better to stick to the original material and use that to directly support an argument.
Simply put, the Dreamsleeve is that part of the shrizophrenic skill ball where every ones conciousness comes from. It is an essential part of Mundus, in a way it is the aggregate identity of Mundus. Afterlife is a construct that covers up this insanity by providing what a person expects too see. It's very much a delusion but a beneficial one.
Slightly more elaborate:
If I'm not mistaken if you are looking at what happens after death. To know that, you have to know what a soul is.
* We know that Arkay governs the souls.
* We know that Dunmer can call their ancestors back.
* We know that Necromancers do the same.
* We know that everything alive and contious has a soul, including the Daedra wich arn't from Nirn.
* We know that souls can be trapped in a gem when they die.
* We know that Nords go to Snovegarde when they die.
From all that I think that the "soul" is just a conection to this world. On one end attached to something physical, such as the body, a soul gem, a skeleton or some ectoplasm. The other end attached to either something in Oblivion or something in Mundus. On death you are disconnected from Mundus and either trown back to Oblivion or connected to Arkay, waiting till you can be reincarnated.
There seems to be a difference between what Souls were in Morrowind in Oblivion. Were in the litterature from Morrowind you actually were trapping a souls, replacing it's body with the soulgem. In Oblivion it would apear thatyou are merely svcking up some Creatia (mythic energy) from a person.
Souls typically act like anchorchain between some place and the body. The body anchors the the chain to the world. When it's destroyed, the chain slips back into where it came from. This can best be observed with the Daedra and Gods who merely have to recreate their anchor to return.
Mehrunes Dagon
WHAT?! Why, you arrogant little bug. You think you can svck the power from me and cast me into Oblivion? Well, it is not so simple as that. So long as my power is anchored to this world, I can resist the outflow of my magica. If not forever, then certainly long enough to blast you and your incantation into component syllables. And consider, fool. No mortal weapon ever forged has the power to sever my anchor to this realm.
Mehrunes Dagon spelled it out for us.
When mortals die they are not able to recreate their anchor so easilly so they go somewhere else. This can be a soulgem, a soulsnare or if you are lucky your respective afterlife. Often this is considerd to be Aetherius or similair concept. However most noteably is Sovngarde, which means as much as "sleepers armcover", better known as the Dream-Sleeve.
The Dream-Sleeve is understood to be the shrizophrenic collective contious of the world. The afterlife you craft out is one long dream in which you'll slowly forget yourselves. Vivec mentions that his death is like sleeping, so it could be assumed that he to goes to the dreamsleeve but does not lose his identity to the shrizophrenia like the ordinary souls.
Arkay is the God of the cycle of life and death. We're born from the dreamsleeve and return to it on death in an endless cycle that is always new.
Birth:
We mortals leave the dreaming-sleeve of birth the same, unmantled save for the symbiosis with our mothers, thus to practice and thus to rapprochement, until finally we might through new eyes leave our hearths without need or fear that she remains behind. In this moment we destroy her forever and enter the demesne of Lord Dagon. - Mythic Dawn Commentaries
Mortals leave the dreaming-sleeve of birth, without any divinity (unmantled) safe for the symbiosis with the special divinity of Nirn (our mother, Mankar wan't to destroy Nirn).
The powers also created Red Tower and the First Stone. This allowed the Mundus to exist without the full presence of the divine. In this way, the powers of Ada-mantia granted the Mundus a special kind of divinity, which is called NIRN, the consequence of variable fate. - Nu-Mantia Intercept
This special divinity comes back in the intercept, Red Mountain (tower) holds Lorkhan's Heart (stone). Lorkhan's heart is also called the divine spark, our shared divinity. As such, we already much like the Daedra, we're separate parts of a larger divinity.
Death:
When people from different cultures all believe in an afterlife and all seem to get exactly what they expect, it is reasonable to assume that their experiences are influenced by their expectations. The Nords believe they go to a place called Sovngarde which can be translated as to a meaning that means as much as the Dreamsleeve, the sleep-enclosure. So we're already back the start.
"The echo of the Void is Oblivion. The echo of Oblivion is now mortal death. Death results in reappropriation of spirit towards its aligned AE either to the god-planet Aedra or the Principalities of Oblivion. Vehk's name for this transaction, mentioned above, is "unar currency" - Loveletter from the Fifth Era
This shouldn't be read as some Heaven and Hell afterlife were people who've done enough bad things end up in Oblivion. The AE literally is a connector and in the sermons it is often used as: "AYEM AE VEHK AE SETH", Almelexia and Vivec and Sotha Sil, Almsivi.
This connection is the soul. Normally, when a person is killed he experiences afterlife, when a Daedra is slain he experiences the void. A soul trap can force the soul to remain connected to a soulgem and a Necromancer can call back souls and force them to animate a body again.
Ghosts can return out of their free will if they have something that binds them, but often you'll see that they've already started to disintegrate and are starting to lose their memories and thoughts while they're being mangled and stripped from their identity in the dreamsleeve.
As I've already shown above, mortals are born from the dreamsleeve, it's their to their divinity so their allinged AE goes to Mundus and while the God planets of the Aedra are often interpreted as Aetherius, they are part of Mundus, they are the gift limbs.
It's also what allows Mankar Camoran to pick up his followers in his Paradise, they've given up Mundus ("destroy her forever") and become part of Mehrunes Dagon ("enter the demesne of Lord Dagon")
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For more:
What are souls post #3
Sovngard/Oblivion
Dreamsleeve
Similar topic:
Death
If you take a hundred thousand million drops of water, don't you have a a single lake? Or if you have one lake, don't you also have a hundred thousand million drops of water?
If there is One, Nine, or Eighty-One it doesn't make a difference because it's only a different way from looking at it and what you see depends on what you think you see. The Imperial gods reflect the imperial idea's and views as high and divine kings, the Nordic gods are more warriors, examples for the Nords, the Redgaurd gods are useful, ect.
The identity of mortals is destroyed, after all Lorkhan "yearned for the return to flux", a period of time from before Akatosh when the gods still could die, "but at the same time he could not bear to lose his identity", showing that even in death not everything is lost.
People and gods can live on in myths, in the minds of many people who all dedicate a small part to him. No different from how Tamriel exists in our minds, one place in a thousand locations.
edit:
Sovngarde/Oblivion about how souls/afterlife works.
Dreamsleeve about what the dreamsleeve is.