so witches can bring the dead back to life? That sounds kinda scetchy. I thought vampirism was made by molag bal as a curse
The joke was, if being a vampire makes one undead, then the coven witches, who are able to cure vampirism, also hold the power to bring people back to life. This is where the whole vampires are undead has some holes, as it is curable, though only a select few know how to cure it. And, well, curing someone from being dead isn't really all that possible. Hell, once a lich is a lich, it cannot go back to being mortal, as it would need to cure itself from death.
As to whether Molag Bal created the vampires, that became sketchy in MW. You see, when trying to cure vampirism, Molag Bal got the cure from Vaemirina (the daedric prince of Nightmares, I just can't spell her name right). To make matters worse, as a vampire, your character will constantly have nightmares after sleeping, which is Vaemirina's representation. Add in the fact that vampires are very nightmaric and operate at a time when everyone is asleep, one could deduce the prince of nightmares had something to do with vampirism. If you ask me, I'm under the notion that the curse was created by the prince of nightmares, and its initial spread was carried out by Molag Bal. Another idea is that the two conspired to create the curse. What I won't accept is that it was purely Molag Bal, until proven otherwise or new evidence comes up.