You know already the answer but I still want to point out that there's about a 100k books and NPC's in the game what tells you why there isn't dwemer in the game.

this is explainedin some of the books in the game

basically: they focused on the steam powered machines so much that they didn't have time to research better forms of personal combat. so the armourers and weaponsmiths continued to create the same armour and weapons as before.

another explanation is that once you have automatons that can fight for you, why do you need to research better forms of weaponry and armour?

dwemer women had beards

Sweet; Thanks for the information.

For an RPG nerd you have failed to fulfill your duties in thoroughly researching the source material. Say three hail Kynareths and drink this Absorb Lore potion.