As the process of subcreation continued, both Anu and Padhome awakened. For to see your antithesis is to finally awaken. Each gave birth to their souls, Auriel and Sithis, and these souls regarded the Aurbis each in their own part, and from this came the etada, the original patterns. These etada eventually congealed.
Anu's firstborn, for he mostly desired order, was time, anon Akatosh. Padhome's firstborn went wandering from the start, changing as he went, and wanted no name but was branded with Lorkhan. As time allowed more and more patterns to individualize, Lorkhan watched the Aurbis shape itself and grew equally delighted and tired with each new shaping. As the gods and demons of the Aurbis erupted, the get of Padhome tried to leave it all behind for he wanted all of it and none of it all at once. It was then that he came to the border of the Aurbis.
He saw the Tower, for a circle turned sideways is an "I". This was the first word of Lorkhan and he would never, ever forget it.
What are the spokes of the Wheel?
For ages the etada grew and shaped and destroyed each other and destroyed each other's creations. Some were like Lorkhan and discovered the void outside of the Aurbis, though if some saw the Tower I do not know, but I know that, if they did, none held it in such high esteem. In any case, some of those that did see the void created its like inside the Aurbis, but each of these smaller voids sought each other out. Void shall follow void; the etada called it Oblivion. What was left of the Aurbis was solid change, otherwise known as magic. The etada called this Aetherius.
Now Lorkhan had by at this point seen everything there was to see, and could accept none of it. Here were the etada with their magic and their voids and everything in between and he yearned for the return to flux but at the same time he could not bear to lose his identity. He did not know what he wanted, but he knew how to build it. Through trickery ("We have made the Aurbis unstable with the voids") and wisdom ("We are of two minds and so should make a perfect gem of compromise") and force ("Do what I say, rude spirit"), he bound some of the strongest etada to create the World.
The spokes of the Wheel are the eight gifts of the Aedra, sons and daughters of Aetherius. The voids between each spoke number sixteen, and their masters are the sons and daughters of Oblivion. The center of the Wheel was another circle, the hub, which held everything together. The etada called this Mundus.
It refers to the chaotic Aurbis after the first brush, with the forces (not entities) of change and potential interacting in a swirl of spirits and their unstable creations. If you like, this is a universal war, or at least a conflict or a whole lot of mayhem. Then, in Vivec's account, Lorkhan returns from the rim of the wheel with his inspiration and decides to bind the powerful spirits and their worlds (which probably just means identities and characteristics, as nothing was permanent back then) into one, forever ending the era of the pure Aurbis where the forces of Anu and Padomay reacted and struggled in such uncontrolled form. So they were pulled out of time forever and subcreation began in earnest.
As to the Ehlnofey and Hist, as it is I've never given much thought to the specific origins of species, but all the wandering and fighting sounds like more allegory. The men/mer conflict is referenced in obvious terms, for example. I doubt that anything in Nirn was transplanted whole from the chaotic realms of the Aurbis, but everything in Nirn existed already within the potential of the creator spirits, and different facets of Nirn are associated with different divine beings. Mortals have been fighting over their differences since Convention, and not just in competition for resources.