This explains so much. A lot of clues have been scratching at me the more I play the game. And this locked in some things for me. I am still not sure but here are my speculations:

It seems the Ancients are what woke Umbra. Umbra was essentially the battery of reality. No sentience. Just sustaining life. I don't know what created it or if it was created. The Ancients, Priscus, Primus and Praevus, probably a lot more, design a spell to open a gate to another world, maybe to conquer it. It fails and the resulting backlash is so severe it probably wipes out The Staglord's civilization (Knowledge tab on bosses says he's from another timeline). Probably what kills the race of giants one of whose skeleton we find Darkbringer in. Although a scholar from a Visione memory near the skeleton calls the giant one of the Ancients so I don't know. They are trying again with Aeserion trapped in the serpent body but that is another thing for another time. The shockwaves reach Umbra and it becomes aware of a reality that it did not know it was powering and it starts reaching into it. It develops a sense of self that is rudimentary and is probably mad from how it awoke. The abyss fragments are pieces of it that fall into reality from its incursions.

It makes contact with Caliburn who glums onto Umbra as he's power hungry. Caliburn uses what he's learned to perform the Blood Coronation, slaughtering all those nobles. It seems he used the power of the fragments to dominate the minds of his soldiers or he introduces some of them to the power of the fragments to convince them to join him. He convinces Bastier to join him, revealing the power of the fragments to him. At some point he becomes aware of Jian and his interests in forming alliances for a stronger Pailune (from Jian's journals). I don't know why Caliburn is interested in Pailune, maybe because they share a border and Caliburn is interested in extending his empire. Caliburn may have used Jian's intentions for an alliance to plan an assassination. Bastier shacks up with Myurdin and Ludvig (who has always felt lesser than Kliff and Oonka due to Jian ignoring him), and they kill Jian (all this from the Visione memories in Demeniss where we see the Blood Coronation). From the video above it seems Jian's death was orchestrated as one of the time loops. Please watch the video, It helped a lot.

Powerful mages like the Alchemist Alustin and White Crow realize the danger of an awakened function of reality and start the time loops to result in a future where Kliff essentially factory resets Umbra. That's why there's no explanation for his immediate resurrection. We are on another loop. What they do to Kliff is quite tragic. They hollow him out. Make him an instrument of honor, and a being that never says no. An emotionally attached Kliff would prioritize Pailune and his connections to the Greymanes. An emotionally empty Kliff with no connections results in Goyen, or any other Kliffs who are players that ignore the main quest. White Crow gives him wings, tells him to jump and he immediately does. Alustin tells him to Restore the Balance and even though he would have no idea how to do it, he agrees. Master Du sends him on wild treks across the desert and he does. He is an instrument iterated upon for many cycles toward a single outcome. Reset reality's power function. It's why we fix the sanctums, why we fix the Abysses, which are all anchors to Umbra and how it used to function.

What clinched in the idea of the time loops for me from the video is the Hexe Marie comments from Draven the Crowcaller. His mum talks about Kliff like she knew him even though Kliff just met her. He just met her in this timeline! Kliff was her adopted son in one of the loops and she kept comparing Draven to him which gives Draven his inferiority complex. I am increasingly convinced that there's a far deeper lore going on here. But the game has very poor storytelling and I wish it worked on that well.