Two ideas here that might be worth mentioning, hopefully they haven't been mentioned already.
We know that in Ep2, they mention the Upper Way. If the Upper Way shows up at all in any of the games, it's going to be one of two things. One option is the place where Traziun goes to fight his father and the "Reflective Sky" area in Ep6 that you get to via the outworld portal stone (the Pits and Reaches have an analog in Dream Estrana, so the Upper Way could have one as well). This is pretty tangible, since you basically have to use some kind of aura warping thing to get there.
The other option is that the Upper Way would be heaven, basically, and would be where everyone's soul is. Given that an aura is a "link" to the soul from the physical world, when a Shadow Sword absorbs the aura, it absorbs a "link" to the soul, and then in Dream Estrana, you're actually interacting with real souls via the auras you've absorbed, rather than just interacting with the auras themselves. Or possibly, Dream Estrana IS the Upper Way and the Shadow Swords/Illuminati provide you a link for getting there, but you can only interact through the auras you've absorbed. This is probably less plausible but might fit in with the whole Christianity aspect.
Looking at Gaius's dialogue at the end of Ep5, it seems that he isn't entirely sure what's going on with the End of the Way and is testing Rhue in order to try and figure it out. "The End of the Way used to be right here." Then they go to the other end of the cave, and it's the place Rhue remembers as the Landorin Massacre. Gaius asks, "You recognize this place?" and then says "Interesting." So if Jeruh/Rhue made up the forest story, then maybe Rhue's auras got mixed up and altered the memory so that it seemed like it was at the river. But it's also possible that the "Forest Run" and the river didn't actually exist at all before then, and somehow Rhue managed to extend the Way through his made-up memories, moving the End of the Way somewhere else. Rolling mists via Rhue?
Why else would the End of the Way move? Because Estrana burned? Because a bunch of Shadow Swords and/or Gaius's Illuminati got close to it? Because Tetzel tunneled through the rocks? And if it's somehow a circular path, why would there be an "End" to it at all?
Just adding some more ideas to the theory collective.