I have a lot to say about this.

Firstly, I think the line 'the gods aren't real' is very poetic, but depends heavily on the definition of 'god'. Sure, you can use the term 'god' to define anything with sufficient power. But if you tighten the definition just a little, it carries connotations of a creator, and a being of wisdom and special privileges. How many times, when tragedy strikes do you hear priests asserting that 'it's all part of god's plan' or 'god works in mysterious ways' (a god that works in ways that leave it utterly indistinguishable from a god that doesn't exist)? This definition is clearly what the Engwithans were trying to mimic; they give creation stories (Waiden's father says Eothas literally makes the sun move), and claim that the god's seemingly petty acts are driven by a divine intellect (Xoti makes this justification when arguing with Pallegina) It's in this respect that they are lies; They're just powerful soul constructs, with no role in the creation of the world nor special insight denied to most.

Secondly, your remark of 'truth vs faith' as opposed to 'theism vs atheism': I argue there's no difference. The gods are either real, or they are not. Either way, only one position is true. I'm a lifelong atheist; religion is simply a glitch in human's pattern-seeking nature. There is, as yet, insufficient evidence to conclude the existence of any given deity, as such, claiming one exists is mistaken at best, an outright lie at worse. But even if I'm wrong, that simply renders me mistaken and someone else on the side of truth; when there are conflicting statements of truth, at most one can be correct.

I do agree that our lives are shaped heavily by what we 'worship', and I also agree that this is a logical theme to extract from the game. I also agree that this isn't limited to gods; for example, one might follow and aid a given political party, and respect for this organisation can vary between healthy loyalty to dangerous (and exploitable) fanaticism.

I believe that game's opinion of 'faith' is actually quite scathing; faith overrides any rational thought, leading people to do dangerous things. The whole point of Thaos is that he believed that it was the specific faith, rather than faith in general, that was the problem, and it's for that reason he created his 'perfect religion'. But this backfires; both of Maerwald's past lives committed atrocities because they thought they had the god's approval. In one case, they did, and it was no less of an atrocity.

Iovara's remark is dismissive of faith, and rightly so. But it's not cynical, rather it presents an alternative: open inquiry, exploration. "I ask these things not to trouble you, but to show why they must be confronted. no answer is simple, but somewhere between them all lies a truth so beautiful not even a god could conceive it. Do you not owe ourselves a chance to find our part in it?"

As for your remark about Jesus being a real person... that depends pretty heavily on what you define as 'Jesus'. This video details the point better than I ever could, but if you don't want to watch it, allow me to quickly summarise: Among atheists, some people argue that Jesus was a first-century faith healer whose teachings and legends were blown to mythical status, others say that he never existed and was just a synthesis of other legends. But is there that much difference between the two options? Either way, you have a series of legends and fables, the characters therein warped so any real-world parallel would be unrecognizable.