Bosmer worshipping Arkay and Xarxes is directly drawn from Varieties of Faith. As far as I can tell, Lady Cinnabar wishes to confirm a theory essentially stating what most of us believe about the Cyrodiilic pantheon: that all the Cyrodiilic Eight draw from both Elven and Nordic deities (and maybe a few other mannish and beastfolk superstitions here and there). She's not concluding they're one and the same, as that would be basically the elven viewpoint of the matter; rather that Arkay is the most obviously syncretic of the three.
Orkey she presumably is considering as the closest Nordic equivalent to Arkay. She might not be totally familiar with the intricacies of their belief, and the differences between Cyrodiilic, Breton and Nordic death-god traditions; on the other hand, being pre-Third Era she may have knowledge of earlier Orkey beliefs, or significantly different, than we normally consider. A third possibility for the use of Orkey as an influence on Arkay, despite their differences, may be because Shor, the most prominent Nordic psychopomp, is of course Missing in Cyrodiil. Any influence Shezarr might have had on the Eight is now erased, or forgotten.
What I do like about this text is the consideration of Xarxes as an inspiration for Arkay by showing the "recording" of life as a form of passing on, immortality through written knowledge and all that. The scribe is a psychopomp because the spiritual realm is that of thought, maybe. And the Ancestors live in memory, not unlike how Sovngarde functions to the Nords. I'd like to see how the funereal beliefs of Altmer were filtered through Ayleids in order to find their way into the more conventional Arkay.
(on that Great Houses text linked earlier: there's http://esohead.com/books/2363-great-house-mottos-annotated annotated by Sotha Sil himself which may be of interest. I assume it has relevance to some Ebonheart quest or other.)