So I was reading the seven fights again and I realized something...it says Dagon wanted to escape from his prison [Oblivion] in order to make sure the Kalpa never ends again...doesn't this essentially mean Dagon wants to perserve the Kalpa from Alduin? So we essentially stopped the only hope of forever preserving the Kalpas, christ we played the villain.

Villain? Kalpa's are not bad. Stopping them from ending is not good, it's just different. Parthalax explains this in Skyrim.

The other depiction of Mehrunes' origin paints him in an even more positive light, but what else would you expect from the writings of a Daedra-worshipper?

But really, the first Aldudagga fight is about the transgression of the Greedy Man, who is probably Shor in this context (he's trapped in and outside of Kalpas, and hides under a mountain that isn't there - sounds like both Snow-Throat and Red Mountain). The Leaper Demon just makes a bargain with him, and suffers for it. I'm still not sure what the mythic significance of all this "world getting bigger to stretch Alduin's stomach" is.

Too big for him to control, maybe.

Never ending expansion until Mundus implodes on itself taking everything with it causing an end to all life with no possibility of a new Kalpa.

Just a theory.