It's a place that exists in Islabard, but it's most likely just like Doma and Crystal Tower. Same name, but not the same place.
I think it's safe to say that's what we got in the end. While Au Ra are still (probably) debated on being either demons or dragons, I think it's safe to say they're definitely not reptiles. They may have scales here and there, but they're otherwise mostly mammal in appearance. They may have lizard concept arts about, but they also have demons and Viera as their concept art, as well.