Warith Magus:
Ok, if it makes you happy: Presumably, even though Black Marsh is a swamp, there are also coastal areas, where the water would be more highly oxygenated. If there's any rivers, those would likely be more highly oxygenated as they are constantly being fed by rainwater (which, I think, correct me if I'm wrong, would be highly oxygenated from falling through the sky). So, even though the entirety of Black Marsh might not be suitable for underwater habitation, there could potentially be some specific places where this would be viable. That is, for example, even though you probably wouldn't have an underwater city in the river itself, because it would presumably be too shallow, you might have a river near the point of the coast where the river dumps into the sea, as the waters near the rivers mouth would get oxygenated by the river, yes? As to the issue of heat, I already mentioned volcanic vents and hotsprings. There are natural sources of heat underwater.
Additionally, you could have an entirely underwater cave which was warm due to being also deep underground (although, that cave might have more oxygen problems).
I believe Blackmarsh is in an area of Tamriel which has a naturally very warm climate, and so there may be many places in Black Marsh or its coastal regions where the water is almost bathtub-warm without any vents or hotsprings. Finally, I have a question: Are argonians warmblooded? They are amphibious, and most amphibians are not warm blooded, and can survive just fine in cold (but not freezing) water, without even really caring or "knowing" that the water is cold (cold water I believe has the advantage of actually holding more oxygen, so Argonians would probably survive better in cold water, actually, than warm water).
And, as Ryan points out, Nirn is a magical place, so there's plenty of room for "extraordinary" things like an underwater city which otherwise wouldn't seem to be "realistic".
You seem to be mistaking speculation for combativeness.
Anyway, oxygenation does not occur through rainfall, at least, not enough to matter for actual swamps or rain forests, it occurs from underwater plantlife. There is, again, a real-life reason for why most aquatic life lives in the shallow bodies of water, and not the wide-open ocean, and that is the most logical explanation in-game without having to resort to all kinds of myth and lore reasons.
Likewise, I'm merely talking about the obvious out-of-game ramifications of introducing underwater cities where none existed before: People are going to ask "where were they before?" That would mean Bethesda would need an answer.
Likewise still, there is a problem with being "too alien" - Just look at the TVTropes entry for "http://tvtropes.org/pmwiki/pmwiki.php/Main/AtlantisIsBoring", where the imaginations of the viewers can be stretched, sure, to include underwater architecture, but that inside of that, there is not enough underwater stuff to do besides go spearfishing.
Yes, you CAN introduce all sorts of new things they can do to generate oxygen underwater magically, and have all sorts of magical parallels to a fire-powered forge... but then, why did the Argonian armorer from http://www.uesp.net/wiki/Skyrim:The_Armorer%27s_Challenge just use a forge like every land-breather if he was supposed to be representing Argonian smithing techniques?
Yes, you CAN introduce all sorts of underwater agriculture... but then, why do they only export rice and root when they could export exotic kelp foodstuffs if that's what they live on?
Or you can just say "they don't live underwater all the time and in large concentrations because there is a limit to the rate of oxygen replacement" or "there are more predators in the water than on land", and have Argonians live on the surface (or at least, mostly on the surface, with a few partially-submerged buildings), like they always have. That way, they don't have to go explaining away the inconsistencies.