This is interesting if you can take it literally as it might suggest another race who are both (possibly mobile) plants and 'sentient' - the Hist. The other interpretation - Darwinian seems far less fun.
It probebly explains why the Bosmer are religious carnivores. Though some other stories mention beast-plant and mer, which seems to be related to their abbility to turn into monsters during the Wild Hunt.
It's not very clear what exactly they were.
It also cocks a snoot at the Altmer who one might expect to do anything and everything in their power including crafting misleading or downright lying tales that place them on the other side of creation from those they believe to be their inferiors - just about everyone else
And this account dares suggests that the Khajiit were older and in some sense senior to the mer
So basically Aldmeris "exists" in the Dawn, but not necessarily INside of Time?
There is no outside of time in the Dawn, rather every spirit with power, and some half dying, had the abbility to control the events in time. Like some ones dream becoming a reallity. From all the stories it seems that everybody experienced the dawn differently.
After the convention all those different sequences of events got thrown together and patched up placing people who believed their ancestors are the Tree-People next to the people who believe they were the off-spring of the gods.
Yet it's all true. Exemplified by the shared Tower building of all Mer.