http://www.uesp.net/wiki/Oblivion:Bosmer
http://www.uesp.net/wiki/Oblivion:Breton
http://www.uesp.net/wiki/Oblivion:Imperial
http://www.uesp.net/wiki/Oblivion:Nord
They look alike. They look alike in the game sometimes, yes, but I think that's mostly because they actually do look similar. They're all "white" more or less, and the only ones without dark hair are the nords. Also, Bosmer/Breton and Nord/Imperial have very similar facial features.
I dunno. I kinda like that they look like they could be crossovers. It's more in line with the lore of where they come from and what their stock is.
The races that should really stand out in my opinion are the Khajiit, Argonians, Orcs, and Dunmer. The dunmer seem to have a different shade of dark than the Redguards (redguards in the orange family and dunmerr in the blues it seems).
But even the redguards seem like they should look like dark-skinned imperials if you ask me. I don't feel like there should be any difference there.
And even in reality, races do have converging appearances in some instances, be it from convergent evolution or just a similar origin (like with Imperials and Nords). It's not too unusual for a fairer skinned Italian to be mistaken for an English person or for a Hispanic to be mistaken as Asian. There is almost always going to be some people that look similar to other races, but even in Oblivion, I didn't think it was that noticeable or prevalent. I could almost always tell what someone's race was from appearance (With the exception, as I said, being Imperials and Bretons, which shared more similar features).