Alex, are you trying to say that Dawnstar (an important town in the Es mythos) is comparable to a town like Hackdirt in Oblivion? That's not flattering.
As for the claim that Morrowind isn't action based. I said "appears" action based. I know the battle system and its more similar to a pen and paper system. However, my personal opinion is that if you hit an enemy with your sword visually it should connect. Oblivion's battle system was not a downgrade, it was an upgrade. In Oblivion, all hits connect if you land them properly. If a monster is stronger than you are its more dangerous to go head to head with them, and spells/archery are utilized instead of a head on approach because it could get you killed. In Morrowind your character could be physically stronger than the opponent and still get shafted because of dice-roll misses. Because of this, Oblivion's combat system is arguably more fun, less punishing, and far more realistic.
Oblivion is not perfect. Morrowind has some advantages gsmeplay wise and depth wise, yes. For example, methods of travel and a lack of fast travel made Morrowind more immersive. Skyrim is the worst out of the three, IMO. Skyrim tried to improve on Oblivion's formula but failed in almost every regard except graphically and visually. I can get takedown cams and dismemberment in Oblivion. That is what mods are for.