It works perfectly on Win 7, no extra steps needed, even for a 64 bit version. Just the normal patches, or get the Steam version that patches it for you.
As for mods, they can be confusing at first, but this forums has a whole section dedicated to them where you can ask help, wand there are many helpful tools to get them up and running. Most popular mod site is the http://www.tesnexus.com/ that has thousands of different mods, think what you would want to change on unmodded game, and more likely than not a mod for it exists