If we belive the lore that Magnus fled, leaving a hole in the heavens, and the stars were made in the same manner. Considering the very real effect Gods have on Nirn. Would this be taken as fact, that Nirn sits in it's own sphere of space with it's moons and simply rotates in place as the moons orbit and the Sun (and by extension the sphere of space) sits still.
Or is this simply a creation myth and Nirns space is just as vast and traversible as our own space?
In Lore for Elder Scrolls, Mundus is referred to as the planets and moons created by the Aedra/Divines who tied themselves to creation's effects including death/destruction. The space around those planets is not actually space itself but its actually Oblivion, so its possible that Mundus is within its own Oblivion Realm, the first one that had ever come into existence. When Magnus and the others left, they punched their way through the fabric of that realm to return to their home dimension which is what created the stars.
But while other Oblivion realms are capable of being practically infinite due to them being intimiately connected to the Princes that created them, the more influence and power they have the larger the realms can expand. The Aedra used up so much of their power to bring life into Mundus that they were not able to expand it further, even with all the mortals of Mundus worshipping them, its only a small amount of power compared to what they expended to bring them all into existence and give life in the first place.