I like TES lore because it's so different from basically every other fantasy game ever.
Mostly because TES already runs on the assumption that history is completely subjective and that multiple contrary events can all be true. As well "past" and "Future" are meaningless terms as they both happen congruently.
Thus multiple authors can basically write anything they want.
My theory is that the reason for this is because the Elder Scroll universe is not "foretold" by the elder scrolls but created by it. Thus narrative contrivances become ingrained upon the universe. Either that or the laws of physics are very weak in Elder Scrolls and thus causality, time, and space are vague forces.
The basic TES lore is quite stereotypical at heart.
It was all but explicitly said in Morrowind that they became the skin of the Numidium. Morrowind only said explicitly that the Dwemer happened to all disappear at the exact moment that Kagrenac used his Tools to activate the Numidium, so that's the obvious connection.
You cannot claim absolute canon within elder scrolls because every possible event that could have created the situation all occurred and the final result is mostly unknown.
As well you especially cannot claim it because the Dwemer exist in the future and the past... thus they still exist in the present thanks to the way time works in Elder Scrolls.
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Basically to understand the lore just remember this: Events can happen in any number of any order and can be as contrary to other events as possible and all be true... in fact any event, so long as it has multiple outcomes, all possible outcomes occur at the same time. This can even extend to "what ifs" as the entire reason for an event can be contradictory but still true.
In otherwords in Skyrim both the Imperials and the Nords won the war... The Azure star was both corrupted and purified...