From the silver bullets of werewolves, silver swords of the witcher, silver is an important part of killing unholy monsters.
I've even heard that the whole "vampires don't show up in mirrors" thing is because old school mirrors were made with silver backings.
I want to know if silver being holy has any origins in medieval folklore or if it's the product of the 19th century "invented tradition" of folks writing fan fiction traditions that they wanted to be true and ancient
Several months ago, I posted an answer to a similar question. I'm adapting it here to fit what you're asking.
Folk traditions are notoriously fluid. There can be little by way of "set rules" on how to deal with the supernatural. In the same way, the same supernatural entities can be described in popular legend in contradictory ways.
Modern media has a way of "locking in" various species of the supernatural, codifying their behavior and other aspects of the tradition, creating dogma that the original folk believers would not understand or might find nonsensical. In addition, there can also be a scattering of "invented tradition" as you say - something that is now increasingly being referred to with a new (2016) term, the "folkloresque," thanks to the folklorists, Michael Dylan Foster and Jeffrey A. Tolbert.
All that said, media depictions of various supernatural beings are often based on something that was found in traditional folk belief. Historically, it is also true that written texts based on but deviating from folk belief can back feed into folklore, altering tradition because of the influential effect of the written word.
This is much of what has happened in the modern world: fairies/elves/etc. did not have insect wings (they flew without the aid of wings), but artists began depicting them with cute little wings; by the twentieth century many folk accounts of seeing fairies described them with wings, something inconceivable in folk tradition a century earlier.
The role of silver in discouraging the supernatural is a rare motif in European folk tradition, but thanks to media, it has become the pervasive "go-to" solution when attempting to defeat all sorts of supernatural manifestations. It is easy to imagine how this has occurred: the media creates a suspenseful storyline where people need to confront and defeat a supernatural menace; the protagonist must find the single, key ingredient to win the struggle; the protagonist obtains that thing (silver being a relatively rare but accessible precious metal mentioned occasionally in folk narratives); the supernatural being is thwarted.
Silver, consequently, enters modern folk belief as the "traditional" way to defeat the supernatural even though that so-called tradition is grounded, largely, in the late twentieth century.
Then there is the question about "vampires don't show up in mirrors." When this occurs in folk tradition, I very much doubt it has anything to do with the way mirrors were made. It is true that people in the past - and today - can confuse the older, "silvering process" of making mirrors as having to do with silver. That is not the case. Mirrors were made with the application of mercury (i.e., "quicksilver") to the back of the glass, but since mercury seems like silver - hence its folk name "quicksilver" - it could, conceivable, serve as a stand-in for silver. Even so, I do not see the silver aspect of a mirror as being the deciding factor.
When people regarded sunlight and mirrors as something that revealed/reveals a vampire's nature, it is because the walking dead lacked a soul in the nature of a living human. The folk believed that the image in a mirror was only possible for someone with a soul, and they believed that one needed to have a soul to cast a shadow. Hence, the walking dead could not be seen in a mirror and would not have a shadow that is otherwise cast by sunlight.
This aspect of the shadow is behind the folk tradition of groundhog's day, which seems counterintuition: if a groundhog can see his shadow it means there will be 6 more weeks of winter. This seems odd to many people since a sunny day seems to bring with it the hope for spring; a cloudy day seems to indicate more winter. And yet a cloudy day means spring is about to unfold. The reason is that a groundhog as a hibernating animal makes a bargain with nature: it can sleep through the bitter winter, but it must leave its spirit underground while it walks the earth in the warmer months. If it can see its shadow on Groundhog's Day, then it hasn't fulfilled its bargain and must return for more winter's sleep.
That's a long digression - sorry. But the point here is the importance of "evidence" of the soul/internal spirit. The mirror and sunlight are important ways to determine if someone is a living human or the walking dead (a good thing to know!!!). The vampire is not averted by the silvering of the mirror; rather he/she is simply easy to be "found out" by a mirror and by sunlight. This "fact" about mirrors is well illustrated by this important illustration of the folk belief - click on the thumbnail to understand this "evidence."