Ethereal Plane

There are two planes of reality. One is commonly called the Material or the Seen. The other, is known as the Ethereal or Unseen. The Material is simple, it is everything you see, feel, and touch before you. But the Ethereal Plane is all that you cannot sense in such ways.

— Merlin, High Wizard of Camelot

The Ethereal Plane, Aether, or as it is commonly known, the Unseen is the half of reality in which all forms of pure energy reside. This plane is the mirror of the Material Plane, but instead of holding color, mass, and defined surfaces, the Ethereal is a place of blurring energy and colors. All beings exist within both worlds are once, but few are able to interact with both at once. Such an action is limited to the Ascended.
Normal creatures that walk through reality will see and interact only with the Material Plane. However, from the lens of the Ethereal Plane the living are blurs of blackness lined with the flowing color of their soul's energy, surrounded by the white energy that their body naturally produces. This is how all things are viewed within the Ethereal Plane. Meaning plantlife would be viewed as black, with veins of white mist flowing through them showing the natural energy found within them. Rocks would be simple black blurs dotted with tiny specs of white energy from the various bacterium and single-celled creatures covering its surface.
In order to interact with the Ethereal Plane, a rare magic known as Spacial Magic is necesary. This allows a being that resides on the Material to interact with the Ethereal by manipulating the fabric of the planes to separate at their will in exchange for a tremendous amount of energy. Due to fundamental concepts of the Material Plane such as Time, Gravity, Electromagnetism and Force being completely non-existent within the Aether, whenever any of these concepts are forcibly introduced into the Aether, it rejects them. Forcing it, and anything that is connected to it back into the Material.
This is why even when using Spacial Magic to shift into the Aether to teleport, all-time around you appears to be frozen. Because you are not part of the Aether, you are forcing the concept of time onto the Plane that lacks such a concept. As such, this allows you to move through the Aether to a new position, until a few short moments before the Plane rejects you, shunting you back into the Material.
The Aether extends indefinitely in every direction. Beyond the limitations of the Material, allowing one to theoretically traverse to entirely new planets through the Aether. Assuming one could resist it forcing you back to the Material Plane for long enough to sustain that travel. The natural residents of the Aether are spirits until an Ascended takes interest in them and grants them entry to their own personal Demiplane. Or, until they lose the will to remain a spirit and disperse into energy. Thus filling the Aether with their own souls power, which then produces various new souls to form the lives of new creatures on the Material Plane.
It is theorized by some scholars that the Firstborn didn't go extinct but instead disappeared from the world due to discovering a form of technology and magic combined, that allowed them to traverse the universe instead of being bound to the single planet created by The Creator.

Spirits

When a creature dies, its energy is normally dispersed out into the world from its body. However, all creatures with souls, holding proper sentience, are released from their bonds and linger within the Aether. How long they linger in this state depends entirely on their own mental strength and willpower, as well as power that they held in life. Spirits within the Aether are generally unable to interact with the Material, however, the stronger they were in life, the more energy they had accumulated and the stronger their will the more they are capable of. Some spirits hold enough power to interact with the Material Plane freely by speaking and listening to the living.
Most spirits will last for only a few years at most, as most are too weak to interact with the Material in any way. But grudges or desires can extend this, and some spirits are even said to be hundreds of thousands of years old. Spirits can, theoretically, become strong enough to not only interact with the Material Plane, but hold enough power to be compared to the living. Some ancient spirits have even been worshipped as deities, and in return grant the area they watch over plentiful harvests by manipulating the energy of the world through the Aether itself.
If a spirit wills it, or is bound by a powerful mage, they can be attached to a powerful Enchantment Orb that will hold their soul and energy. This allows them to exist within both planes at once despite not being Ascended, and as such gain far more power than before. But in return, are bound to the item in question. Some powerful spirits are able to bind themselves to a location, or even possess a creature to use as a host. When this is done it becomes a constant battle to crush the creature's own soul. It cannot simply destroy the other soul, however. As if it dies, so to will the new host and as such it must be constantly suppressed instead.
On the other hand, a few rare situations happen where a contract is made between a spirit and a host. Allowing them to help one another equally, and in return, there is no dominance or suppression of will as they trust one another with their individual energies in order to survive and complete their individual goals together.