I was wondering if there was any info on the bird men of ancient Cyrodiil mentioned in the 4th fragment of http://www.imperial-library.info/obbooks/father_niben.shtml.

Is there any mention of them anywhere else, or even signs of their existence? Has there been any intents to flesh them out more, or will they be left as they are?

In the explanation following the fragment, it mentions that they likely fell to the "cat demons". Does this mean that they are all gone, or did they have descendants? Could they possibly be the ancestors of a modern race?

No. They were just made up by a Dev who wanted Sylvester to have his final revenge on Tweety Bird.

The Wild Elves (ayleid remnants), probably. They seem to be able to transform into birds. "cat demons" might be the khajiit.