of all npcs in daggerfall, i think elysana is the only one that really stands out since she wants to kill off the player.
The whole Wayrest royal family are probably the most developed characters in the entire ES series (well, except for Eadwyre). They've appeared in two games, and have several books devoted to their exploits. Even in Daggerfall, they all stood out to me as interesting characters. I guess Vivec is equally developed but...well, don't get me started on Vivec.
But I don't like when they make radical changes which contradict what was canon before. For example, Imperials didn't have Roman names in Daggerfall nor Arena (Jagar Tharn, Ocato, Lady Brisienna, and Uriel Septim are all Imperials and don't have Roman names). Why introducing them in Morrowind then? This was a nonsense, and I read an interview of a former dev telling some disagreed with the change, which can explain why the Roman culture we saw in Morrowind Imperial settlements (the Imperial Legion uniforms for example) was banished from Oblivion. However this was not the worst 'lore-change', as we didn't know many Imperials until Morrowind. The worst change was with Bretons which were given French names. But Breton names were already established in Daggerfall, like 'Gondynak Hawking', 'Theodyval Yeomham', 'Tristoryan Moorcroft', 'Bridwell', 'Gothryd', 'Eadwyre', etc. They should have expanded on that instead of radically changing the lore.
The Imperials were Roman influenced starting with Daggerfall. Look at the names of some of the emperors: Pelagius, Antiochus, Magnus--all known Roman names. Somebody correct me if I'm wrong, but I believe "Uriel" is a latinization of a Hebrew name. And if you can think of a more Roman name than "Tiber", well, I owe you a coke.
The reason it's so jarring in Morrowind is that the Septim Empire went from being Roman influenced to outright Roman. Architecturally, philosophically, institutionally, they were a direct copy. That's fine, since it's the first we really met the Imperials in a full game, but ideas like the "Reman Dynasty" are pushing it even for me. (But I was an Ancient History major, so I'm sure I'm easily offended on such fronts.) In Daggerfall the Empire was portrayed one way, in Redguard another, and in Morrowind another. Oblivion completely changed the Imperials AGAIN...so it's getting really difficult to figure out what their culture is.
Loved the Daggerfall version of Breton names though. As for the KoW in Oblivion...well, that might be the only time I've ever seen a fan community go into such complete collective denial: "It's okay, that wasn't even really him." I would dearly like to believe Bethesda didn't stick him in there as some dreadfully misguided attempt at fan service, but it seems like that's the simplest explanation.