Ahem, in order:
Surprised and gladdened to hear that it doesn't conflict with Vality's Balmora, though this next version might because I'm adding new buildings (you heard that right, folks! Each will have its own interior and an NPC or two inside) and they might go in the same place as the trees.
Kind of disappointed to hear about the strider port, I'll get that fixed up in this next version.
Merchants now have torches, the story behind that is that at one point there were lanterns affixed to the canopy, so I consciously chose not to give them torches, but then I deleted the lanterns because I decided they looked silly, and forgot to give the merchants any lighting of their own.
Nothing I can do about the lights up to high town, as far as I know. From what I understand, Morrowind can only display 8 lights in a cell, and any additional ones, while looking nice, will not actually display light. Apparently those are the ones to get the boot. I could delete some of the other lights in High Town, but the effect would be kind of spoiled if I did that. I will look into it.
And, finally, the canol is the canol :shrug: Not much I'm willing to change there. It's easy enough to fix if you want to do it for your own game, just delete the meshes and make sure that you get rid of the pathgrid leading down there, so you don't have NPCs falling into the canol