Nice. Definitely liked the ambiguity of gender used in your post, Madcat. I also think you are definitely on to something in what you said about Mephala creating both groups and setting them after one another as an elaborate game which he/she enjoys watching. As for the identity of the "night mother"...
I believe there have been many night mothers and will be many more before Lorkhan returns...
Probably the original night mother was an avatar of Mephala, and therefore it is true what the in game book says. I agree, also with Crimson about the MW night mother not being mephala.
I also agree with Narrator. Am I the only one that realized when he said Empire, he was talking about Cyrodilian culture, not so much the empire as an autonomous entity? To anyone who thinks this was an oversight on the part of the developers, I have this to say to you: The stigma attached to daedric worship during the O crisis would possibly deter candidates for membership, as well as clientelle. Think about it, man. That's why in other provinces the DB still reveres mephala but just not in the game OB. It's not laziness on the Devs' parts. The lack of Mephalite worship in the Cyrodilian DB makes things either more or less complicated depending on how deeply you look at it. As I've always said, TES is a thinking-man's game. In this case, there is a perfectly logical explanation for it, if you have the eyes to see and the ears to hear such a thing. If you simply wanna plug your ears, close your eyes, and bash the devs, then go right on ahead. It's your choice.