Oooh, I think I like your idea. :^) That would add another good reason to explore and enjoy all that Morrowind has to offer and it would just make magicka more fun, which is always a good thing (I've only played pure mages in Morrowind for the past couple years ;^).
Yeah, it seems to me that a monster identification system would indeed be awkward to implement in Morrowind. A text overlay on the screen near the creature (as in Diablo) wouldn't work at all in Morrowind so it would probably have to be done somewhat awkwardly like you've suggested. I don't think the system would work nearly as well as it did in Diablo if we have to pause combat and scroll through a page of information every time we want to know about the critter we're fighting, it would be less hassle to just keep blasting it with fire balls until it keels over. ;^) Oh well, I guess you can't have everything.
edit - On second thought, maybe a text overlay wouldn't be too much of a stretch. What if it was an overlay like you see when you look at an alchemical ingredient? You look at the creature and a box appears above it (or maybe in an out-of-the-way corner of the screen?) with its name at the top and a list of strengths, weaknesses, and ???s for those items your character doesn't know about. Hmm, this is something interesting to dream about. :^)
oh if thats possible that would be awsome. Hmmmmm it might need MWSE, i hope it wont need MGE as i cant use that lol. Perhaps Fliggerty or Yacoby could shed some light on it?
actually maybe a paper version wouldnt be so bad. It would mean that the player would have to do their "home work" before tackling strong foes again. A good thing would be to have the mod also add stronger varients, like captians and what not to provide more of a challenge.
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Also perhaps a new "type of mage service" could be added to the mages guild, where the player can by pre-written scrollls, and ask the mages for information nad tips about certian foes? Oh that could add a new class a hunter type mage. A Tracker or something like that. possiblities are endless...