Ah. I'd been under the impression that Lorkhan wanted from the beginning, to build Nirn to achieve CHIM. So when did he see the Tower? During Nirn's construction, or did he see it and get inspired to create Nirn based on what he saw?...
Your first model is more correct. Lorkhan saw the tower, then contracted the aedra to help him build Mundus, which was an attempt at CHIM.
"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.... 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."--Vehk's Teachings
Yes, I'm having trouble defining reality. I'm thinking from the point of view of the real world not a fictional world that can exist in the way TES does. When I heard "dream" I instantly think not real, immaterial, inconsequential.
The only time the illusion or dream become inconsequential is when there is something else outside them to relate them to, but in TES there isn't. It's abit of a paradox; an illusion is only such in comparison with a reality. It is nonsense to say that
everything is an illusion, because that solidifies what is meant to be etherial. But this is exactly what Mundus is, solidified possibility, solidified magic, solidified aetherius, [if you want, 'solidified illusion'], a contradiction which shouldn't be allowed - the
"center which cannot hold" - where myth and illusion take on corporeality and become truth. It's an illusion that doesn't have the benefit of being an illusion.
The fact that it is a contradiction which shouldn't be allowed is why CHIM is so difficult, why most zero-sum and why even CHIM itself is a constant state of struggle to maintain it. This is important, CHIM isn't a step in the ladder that's secure once you get there. You don't get to achieve CHIM and then just reap the benefits, you have to constantly fight. This is why
"Those scholars that can perceive its shape regard it as a Crowned Tower that threatens to break apart at the slightest break in concentration" and
"It is a return to the first brush of Anu-Padomay... Moreso, it the essence needed to hold that 'dawning' together without disaster." CHIM is both the understanding and the ability to maintain it.
What then is Zero-Summing? Vanishing because you realize you're not real or vanishing because the reality is too heavy for your mind to comprehend?
Both. Though to be more precise it's not because you're 'not real' in the general sense of nothing being real, but because
you are not real in the sense of being an
individual.