Definitely not for everyone, but it's magical if you're into that kind of thing. I actually like the hit chance combat, which most people seem to hate, because it gives me a real sense of progression as my skills raise.
When I was younger and first playing it, I loved Daggerfall and honestly the Vvardenfell look didn't appeal to me all that much - but in retrospect and years later, I love
#Morrowind and the unique look of its areas, deciding it was a very important factor that I was overlooking at the time.
Completely agree that with what you've said, IMO Bethesda has massively regressed since Morrowind in many ways. For every step forward (visual fidelity, combat animations, etc), they have taken a step backwards (eviscerating classes, streamlining too much, removal of spellmaker, removal of magical schools/spells/effects, etc). It's painful to watch, because I do fear this is only going to continue with TES VI as opposed to them looking back on what made their games more complex and interesting in favor of accessibility for a wider market.
Factions were best presented in Morrowind, no doubt in my opinion. Some factions interacted with others, you could become locked out, and most importantly, any and all characters couldn't necessarily join all factions. One such case, the great houses! This is something Bethesda has moved away from and I really hate that - instead of encouraging players to replay the games with another character, they seem to be afraid of that and would rather make "omnicharacters" that can "do it all" or close as possible, including joining and becoming leader of all factions.
Sadly, it means while I'm still excited for TES VI (I mean, outside of obvious reservations that we all probably share in general), I feel like in the future it's to other companies I have to look for that potential of emulating Bethesda's older style.
Morrowind is still one of my favorite games of all time to this day, I just replayed it last year or so and had an absolute blast. One amazing thing is the wonderful modding community that is still alive - projects like Tamriel Rebuilt are absolutely insane in terms of landmass, quests, etc being faithfully added to the universe in a way I don't think Bethesda would even be capable of anymore, which is sad.
That being said there's plenty of neat thinga that I wish beth would bring back to ES6 if that's ever happening in our lifetimes. Fast-Travel options, more expansive equipments, better faction progression, more freedom in spell making and using.