good side of this is that you have more freedom with Daggerfall side quests. If a side quest sends you to a dungeon you don't like just let the quest timer end and ask for another quest. They are procedurally generated from a quest template and each time you will be sent to a different town or dungeon.
The only bad thing about "just letting the quest timer end is faction standing, 1 because you fail a quest and 2 if you haven't done missions for a certain guild in a certain period of time, your faction standing will gradually drop. At least that was always my understanding when I played (I normally joined several different guilds, like Fighters Guild, Knights of the Dragon, a Temple, like Temple of Mara/Dibella, to get free/cheap services, etc. and just to help a Temple full of dancing naked (but pixelated) women.
A better way to me was just to be selective about what quests I accepted either by reloading *gasp* or leaving and coming back - I think it was after like 24 hours, they would offer you a different quest... but it's been a while, so I'm not sure.
There were certain quests that were easy to do just to rank up in a guild, like "protect the special artifact at the Mages Guild from thieves" a short, overnight quest. Also, the "travel to x palace and kill the imps or whatever vermin have infested it" was pretty easy, I believe. The reason I say "easy" is that you will find the first time you are sent to retrieve "mummy wrappings" from the bottom of some huge dungeon that takes you about a week of real time to search through may seem 'epic' at first, but after you are asked to do that same quest for the 20th time, it gets old. It is especially old, if you encounter the bug where you *can't find* what you are sent to get. I mean, it is no where in the dungeon. I think there was a flaw in some dungeon generations where the location of the quest item was basically impossible to reach. There are cheats around that, though, but I hate cheating by teleporting b/c it feels cheap, even if it's to get around a bug...
Otherwise, I agree with most of what you said.
Since you have an unlimited number of quests to gain experience from it's easy to maintain the same play style. For example want to play a pure thief like in the Thief series who avoid fights, then join the Thieves guild and search for those quests which provide a pure thief experience.
This is true, If I am remembering correctly, I think sometimes you can even buy something from a pawn shop to fullfill a quest obligation - I could swear I remember doing that before just to get around the "search the depths of the crypt " for some trinket" trap.