We develop mathematical models of the transmission and evolution of multi-strain pathogens that incorporate strain extinction and the stochastic generation of new strains via mutation. The dynamics resulting from these models is then examined with the applied aim of understanding the mechanisms underpinning the evolution and dynamics of rapidly mutating pathogens, such as human influenza viruses. Our approach, while analytically relatively simple, gives results that are qualitatively similar to those obtained from much more complex individually based simulation models. We examine strain dynamics as a function of cross-immunity and key transmission parameters, and show that introducing strain extinction and modelling mutation as a stochastic process significantly changes the model dynamics, leading to lower strain diversity, reduced infection prevalence and shorter strain lifetimes. Finally, we incorporate transient strain-transcending immunity in the model and demonstrate that it reduces strain diversity further, giving patterns of sequential strain replacement similar to that seen in human influenza A viruses.