You're honestly not doing anything wrong. Morrowind is a really unsatisfying game for a lot of reasons. The RNG based combat mechanics feel off in a game that lets you aim your strikes. The quests are difficult to follow, offering vague and often incorrect directions for long cross-country treks where you're constantly attacked by annoying flying creatures. Getting the most out of character advancement encourages you to play in a restrictive way.
Morrowind really shines when you're able to work past all that immerse yourself in the world anyway. Without spoiling too much, you're released from prison without much skill or equipment into a fractured society, full of political and racial tension. It's up to you to explore and navigate your way through things and the world is rich enough to (usually) support your investigation. The story leans into typical tropes about the "chosen one" and power creep in a way that makes it compatible with using a little meta-gaming knowledge and min-maxing while roleplaying. After a little artifact hunting and enchanting you're soon able to breathe underwater, levitate at will, instantly kill everything in a 50 foot radius, or jump vast distances across the continent and land gracefully. All of which would feel pretty cheesy if it weren't set on an island ruled by three individuals who have amassed enough arcane power to be called gods.
Speaking for myself personally, Morrowind is one of those games played as much in the theater of one's mind as it is on the computer screen. As others mentioned, mods help a lot to make the game more visually immersive and iron out some of its rough edges. But ultimately what appealed to me about Morrowind is weaving my own story into the setting, climbing that power curve from nearly powerless to god-like.
About min-maxing: Teenage-me made the mistake of discovering that the vendor economy in Morrowind is fundamentally broken. Basically, the base price that vendors will buy and sell something for goes down when they like you more and up when they like you less. There's also a spread affected by this too, which should compensate for that, but if you max out the mercantile skill, then that spread is narrowed enough that you can buy something for cheap, make the vendor like you less, and then sell back the same thing at a profit due to the now increased base price. Luckily, making a highball sell offer offends the vendor in a way that will make them dislike you, but only for as long as the current conversation lasts. This means if you first bribe vendors to max out their affection toward you, then after that it's possible to buy their whole stock for cheap, temporarily offend them to increase their prices, then sell them everything back at a profit, end the conversation, then rinse and repeat. This way you can farm the vendors for all their gold.
You have to wait a while for the vendors' inventory and gold reserves to reset - luckily one thing you can use all that gold for is paying trainers to improve your skills, after which you'll be able to level up if you sleep (handily resetting the vendors). With the right trainers, it's possible to always improve enough major and minor skills together before sleeping, that you power level, gaining the maximum stats per level.
The first real city you get to, Balmora, has trainers that cover every single skill I cared about (maybe all of them?) and enough vendors to supply you with plenty of gold to pay the trainers. I made a "circuit" of the city, where I would run around farming vendors and paying trainers, then sleeping to level up. After doing this for a couple hours, I'd already leveled up more than the game expected me to do at all - enemies didn't seem to scale all the way up there that well, and because I'd consistently powerleveled, my stats were super high too. I still completed the game, but it wasn't all that challenging, felt more like a sandbox to play god in.
That's nowhere near the worst exploit in Morrowind. Potions let you temporarily improve stats, which lets you make better potions. You can very rapidly make this spiral into godlike power, very early on in the game.
I've not played Morrowind or Oblivion but I've played the other three in the series and a similar mechanic exists in Skyrim as well, although it's not possible to do it in the early game. If I remember correctly you make a potion that lets you craft better armour, then craft armour that lets you craft better potions.
It was much easier than that in the earlier games as you could make much more unbalanced spells (and enchantments too).
You could basically make a Fortify Alchemy 100 for 1 second spell, and because potion crafting paused the game, you'd cast it, open your inventory and voila, infinite potion crafting at max skill level.
It's worse than that: Make a fortify Intelligence poition. Drink that potion. Make another fortify intelligence potion - it will be a bit better than the previous one. Repeat that a couple of times and you can make potions that fortify your attributes by thousands of points and last for hours.
But potions need ingredients you say? Find a merchant that restocks the ingredients you want. Buy them. Close and re-open the inventory - the merchant should have immediately re-stocked. Neat. You could just repeatet that but that's too tedious. Instead, sell the incredients back to them. Close and re-open the window and buy all of the ingredient agiant. Close and re-open the window and the merchant will have re-stocked the total number they had before. Repeat for exponentially increasing stocks.
I never finished Oblivion, but as I recall, by far the most broken strategy was to just never rest, so you never leveled up. Enemies are scaled with your level, but you could get most of the benefits from improved skills, but not face stronger enemies that way.
Leveling in Oblivion was linked to the major-skills that you selected at character creation, so it was beneficial to pick the ones you didn't intend to use. That way, you could pump up the important ones without scaling up the enemies.
Morrowind didn’t have much, if any, enemy scaling. Which is fun when you’re at low levels and trying to avoid caves full of high level enemies but can make things dull if you power level.
This is a good thing, it means your accomplishments and growth are meaningful and impactful. Nothing worse than becoming some godly powerful being and yet everyone else in the world suddenly is godly powerful also, makes you wonder what the whole point of leveling is. In Morrowind once you are able to take down high level opponents, you feel like a badass and you know it. You truly achieve godhood. The expansions also are more difficult so it's not until very late game that you finally get strong enough not to be challenged (unless you exploit of course).
I actually like that kind of scaling in RPGs where you start out as powerless but become overpowered towards the end - Mage classes often tend to scale like that.
I did try to bribe the traders and get on their good
side, but they always had
1. goods I didn't want
2. not enough money to buy my stuff
3. bad prices
Yeah, I didn't really enjoy that mechanic where you get on their good side, don't like it in real life either and I think that's what stopped me from maxing those skills.
I did, however, find a scamp in Caldera who would buy anything with a fixed original price and didn't require any flattery. He also had 5000 gold and when you maxed it out, you just waited for 24h
Morrowind really shines when you're able to work past all that immerse yourself in the world anyway. Without spoiling too much, you're released from prison without much skill or equipment into a fractured society, full of political and racial tension. It's up to you to explore and navigate your way through things and the world is rich enough to (usually) support your investigation. The story leans into typical tropes about the "chosen one" and power creep in a way that makes it compatible with using a little meta-gaming knowledge and min-maxing while roleplaying. After a little artifact hunting and enchanting you're soon able to breathe underwater, levitate at will, instantly kill everything in a 50 foot radius, or jump vast distances across the continent and land gracefully. All of which would feel pretty cheesy if it weren't set on an island ruled by three individuals who have amassed enough arcane power to be called gods.
Speaking for myself personally, Morrowind is one of those games played as much in the theater of one's mind as it is on the computer screen. As others mentioned, mods help a lot to make the game more visually immersive and iron out some of its rough edges. But ultimately what appealed to me about Morrowind is weaving my own story into the setting, climbing that power curve from nearly powerless to god-like.