But for roleplaying purposes lore outweighs how the game actually physically works.
You dont observe the phases of the moon either when alchemising, as you would if you were really in Tamriel.
But I roleplay I do.
You're missing the point.
The Elder Scrolls is a series of role-playing
games. That last bit is important. Just because your role-players are willing to forgive pretty much anything if it makes lore sense doesn't change the fact that you have to abide by some basic rules of good game design.
Why are there separate "schools of magic?" To allow the player to specialize in a specific school. For this to matter, the schools have to have some kind of mechanical identity. It has to mean something to be a Conjuration specialist, as opposed to a Restoration specialist. Each school has to
do something.
For the most part, each school
does do something. Destruction destroys, Restoration heals, Conjuration creates, Alteration alters, and Illusion deceives. Mysticism doesn't do anything. It's the grab bag, the magic school equivalent of the drawer marked "Misc."
In an ideal world, you could create an identity for Mysticism. It would presumably revolve around screwing with magic in various ways - spell reflection, spell strengthening, enchantment, counter-magic, dispel effects, the works. You'd also have to remove some of those abilities from other schools. Even then, though, it'd be a pretty limited school - great when fighting mages, pretty much useless in any other circumstances. Bethesda obviously chose not to go down that path, and the game isn't necessarily worse off for it.
Also, yeah, I wouldn't be surprised if Enchanting had replaced Mysticism as a magic school with associated spells.