Are men simply gullible idiots tricked by Lorkhan or are they truly made from Mundus?

Men?

Well, they've got, y'know, dangly things.

Down there.

neither

I don't think it was all a trick, and mortals were et'ada at one point, so they can't have been made from Mundus.

I interpret "made from the Mundus" as another metaphor of sorts, like the sundering of old Aldmeris. Whereas the elves see the creation of the Mundus as a loss, the men see it as a gain. The elves seem to think they were gods before the Grand Construction, whereas the men think they were basically nothing before it. Now they have purpose and strength and power, the opportunity to change things. The Dunmer share this view, saying that before the Mundus there was nothing, and only idiots have names for and revere this nothing. The Redguards seem to throw in with the elven view, that Sep screwed things up for everyone and now they can't get to the Far Shores anymore.

Like Hellmouth says, they were all et'ada. As far as I'm concerned the only difference at the beginning of all things was perspective.

They were people who signed up for a boat trip, and enjoy the boat trip, even though they can't do all of their favorite main-land things.