The Au Ra could be the result of some form of cross breeding between dragons and mortal species but I doubt Shiva was involved. I might be wrong but Shiva isn't that ancient since she is a figure in Ishgardian history and the Au Ra are not only a race with a fair degree of evolved variation but aren't even native to the continent.

Also we know that either dragons can turn into mortal forms or turn mortals into dragons.

I suspect playable Au Ra will be Doman refugees who arrived on other boats from Yugiri's. She did say that there were other ships out there.