Of course travelers won't see Nirn; they're in another dimension all together. Travel requires an excellent map, or else you become lost. Travelers, and other transcendentaly minded individuals, wouldn't use a false map. Would you stake your life on a false map, if you knew it to be untrue? [No, you wouldn't] Point being, the universe is layered, Nirn is the center, and Magnus orbits Nirn.
I don't think they're in other dimensions, as Oblivion can be seen in the night sky. I think the planes are out there somewhere, too distant to be seen from Nirn even with the aid of a telescope, basically extrasolar planets.
As for Nirn, mortals, especially elves, tend to consider themselves the center of everything. Again, I say that Nirn is pretty important in the Mortal Plane, as it is where the Divine Pact took place and took hold. But it doesn't make it the literal center of the universe. It could just have been the location of the Divine Pact because it was Lorkhan's plane. And outside of Mundus, it's not nearly as important. The reasons for such beliefs are due to widespread elven myths. Not only has it been spread further by the Cyrodiilic Empire, which borrowed from both the Ayleids and the Altmer, but the very idea that everything revolves around Tamriel is pretty appealing to mortals. To quote Haskill:
Ah, the elves. That most self-centered of mortal races. It is inconceivable that anything could occur that has nothing at all to do with them. Do you really think that Oblivion exists solely as a shadow of Mundus? That everything that happens here is connected in some way with your pitifully limited world? I can tell you, speaking only for myself, of course, that sometimes entire minutes pass without me thinking of mortal affairs.http://www.imperial-library.info/interviews/si_interview.shtml
The two are intrinsic to one another. If I were to say: metaphysics is based on physics, and vice versa, I'd be right twice, because both are true. Regardless, you've supported the Convention, by merit of supporting the 'Divine Pact' of Cyrodiil. The universe-as-layers model holds true.
I do not believe the Divine Pact created the universe, nor was it the center of it. Such is just typical mortal thinking. The way I see it, it merely altered a small area surrounding Lorkhan's plane.