In Divine Divinity the Source was used by healers, discovered by the "meditation-explorer" Ruganol during the Age of Deception (roughly 1000 years before the Age of Chaos, when DD takes place. The Age of the Damned and the Renaissance were between those 2 ages, and the first 3 were 4-600 years each. The historian that first divided recent Rivellonian history into those ages also predicted that after the Age of Chaos would be the Age of Lies, a time of great trouble for the 7 races.
A ship carrying Ruganol (and others) landed on the northern coast of Rivellon when demons and wizards had Rivertown under siege. Ruganol offered his services to Duke Dylan Ferol, and taught other healers how to make a mental connection to the Source. When the war against the Damned was won he was given the tile 'The First Healer', and left to teach those in other countries about Source.
One of the books said that some healers thought the Source was a minor deity (calling it a "primitive belief"), while most believed it to be an extra-dimensional energy field.
The 'cataclysm' was the magic unleashed in the war with the Black Ring, after Damian's return to Rivellon.
Aleroth being built up quickly isn't surprising. Gold rushes have built cities in a couple decades, so 80 years for Aleroth, with a similar boom in healing potion production, can easily explain the change.
