How can I use the output sound from GarageBand as my 'mic' for Skype or similar?
I just used the Blackhole.‌ It worked perfectly.
At the very high level you have to do these things:
Follow these screenshots and steps to:

Add blackhole to your OS. It's not an app you install. It's a package. Once you install it. This creates a new audio device ie adds an item named blackhole to the list of your audio inputs and outputs.
Create a Multi-output device (I did blackhole + Headphone) using your Mac's Utilities.

Then

In Garageband you set your output to that blackhole (not Multi-output)
In Skype your set your Mic input to that blackhole (not Multi-output)
Done! Begin speaking into your primary audio input source (I used my Mac's microphone)

All the steps are mentioned in detail here. Garageband is the 'sending application'. Skype is the 'receiving application'
The end result for me looked like like:
Create new project:

GarageBand Settings


I've also been told that you can achieve the same using the Loopback app.
btw, everything I mentioned in my answer is free.