Are you talking about the books about the floating island? Those actually explain things after the Oblivion Crisis? hmm.. I'm gonna have to read those if so..
Indeeeeeeeed. Also they're pretty rad and it also explains why Umbra, the most broken sword in TES, is not in Skyrim.
I wonder if the Elder Council is still around? What about Ocato?
The Elder Council is indeed still around. Amaund Motierre, the man who hires you to assassinate the Emperor, gives you an amulet specifically made for members of the Elder Council as payment. As for Ocato, he realized the threat of the Thalmor much sooner than most people in Cyrodil or even Tamriel. So he much greater knowledge as to how to counter them and what their plans may be, so naturally the Thalmor had him assassinated. His assassination lead the remaining members of the Council to start conniving and backstabbing and grab for power, which the Thalmor took advantage of by going off and doing whatever they wanted since the Empire was all splinted and had no leader and such.