Each city is an allegory for a different literary trope or storytelling technique. The fact that they all blend together is a commentary on how story elements get recycled.
In one key exchange in the middle of the book, Kublai prods Polo to tell him of the one city he has never mentioned directly—his hometown. Polo's response: "Every time I describe a city I am saying something about Venice."
Or maybe better put: it's clearly not literally all about Venice, since the cities as described do not (and can not) exist. So why make it figuratively all about Venice?
Here’s a chart someone made: https://www.deviantart.com/monkeelino/art/Invisible-Cities-M...