It's solid, but things like trees and rocks I can just walk through. Red Mountain itself isn't solid and you can just walk through it. Same with White-Gold tower. And yes, you are correct about IC, I didn't realize until I had gotten closer. Still, wonder why they added this to the game.
But yeah, I imagine it's just all for aesthetic reasons. It's possible to see White Gold Tower from mountains in Skyrim, same applies to Red Mountain. Plus it adds a lot of land for us modders to be able to play with

