Think of the Elder Scrolls universe (the universe - not the games) as Shakespeare’s Romeo and Juliet. Each game, book, art piece, playthrough, etc. are then different versions of this one central piece of fiction, just like there are many different editions of Shakespeare’s play. There are books, movies, theatre productions, audiobooks, a ballet… but they are all Romeo and Juliet. Some of the editions make only minor edits to the “real,” original work of fiction, others make sweeping alterations. C0DA, in this analogy, is something like West Side Story. Or, to use another play as the starting point, Rosencrantz and Guildenstern are Dead. It takes some of the themes of the world and shifts everything around them in order to examine them from another angle.
Michael’s C0DA is, in other words, not just his view on the world. C0DA isn’t a fancy word for headcanon, unless your headcanon is a work of fiction set in a different genre and a different setting than the original universe with the expressed purpose of reinterpreting the world rather than expanding it. C0DA isn’t a fancy word for fanfiction or apocrypha or anything else you want to call it - though your fanfiction could certainly be a c0da.
C0DA is speculative fiction about an already fictional universe.
Michael’s C0DA is also very self-aware (though yours doesn’t have to be). The superhero scene isn’t there for some in-universe purpose, it isn’t there because in the future Tamriel has TV, or because it’s a drug trance of Jubal’s or anything like that. It is there to use the medium (a classic superhero comic/Marvel movie) to set a tone and paint a picture. Rather than explaining in a thousand words how the Dunmer feel about Almsivi and their relation to them, it says, “Ever watched Avengers? Yeah, like that.”