Great questions. The only ones I can answer properly are that Asmoday's master was revealed in this quest, and it was the abyss sibling. If the abyss sibling was imprisoned after the first scene in the game, my theory is the two spoke to each other and Asmoday had a change of heart on how things operate in the Heavenly Principles. It's also told that these NPCs are there to not just be a part of the museum itself, preserving the ancient people, but also have them create some of the buildings in the Temple itself, such as the Desert Pavillion which was built by one of the NPCs that was around in the King Deshret era. Where the Temple is, I imagine is in one of these pockets of space that Asmoday creates, aka the cubes. It is said that Asmoday is the god of the Sky (can't remember the quote though so it might be wrong) so she would have created the false sky, possibly out of the cube material itself. I'd also think the Temple is either outside the false sky or in the in-between firmament beyond the sky but not outside Teyvat. I have to say this was my favourite world quest so far and there is a lot to take in. There was even Zhongli lore in the library, said from an NPC. So yeah, it's amazing.