A myth is just a story, and in Tamriel the stories act more like cosmic court case precedents than simple tales. It's the blueprint for nature, and nature mimics the plan.
Or in other words.. here's an example:
You create a myth of a god doing this and that, being known for stuff. You spread this and wait for it to root, people to spread the lies and the myth to become believed in. Then you enact that imaginary god -> POOF, you're him and have always been.
This is "creating a myth echo and mantling it as well". The more useful things you could do with the meta-physics of TES.
Well.. simplified, it's not THAT simple of course, but that's the idea.
So a myth-echo is the effect of myths on "TES reality". Myths materialized themselves in one way or another. That's the echo.