I Is it possible to create a disease on oblivion using the CS? If so, how?

By creating it.
Go to spells, right click 'New', create your disease and select it to be of type 'Disease'.
Effects need only magnitude, as little or as much as you feel right. Duration and Area don't apply to diseases, so ensure they remain at 0.
Ensure that Auto Calc cost is off and set its cost to 0, or else it will ignore disease resistance.

For your disease to have a chance of appearing in the game, it needs to be in a leveled spell list that is used by actors, or add it directly to an actor's spell list (not recommended). There are some leveled spell lists in vanilla aptly named 'LL0Disease...' with the name of the animal they appear on, you can use those. Or you could create your own and set the chance for the disease to appear there, but then you have to add that list to actors directly.