There were satchel charges in Morrowind so given how smart the Dwemer were I'm pretty sure they weren't far off creating firearms.
No. Simple fact, they weren't "close to" the level of technology needed to build firearms, they
had the necessary levels of technology.
But- the critical issue isn't
could they create firearms, but
would they and the answer to that is "no." Their only concern was creating their machine god, which is why they had bows, crossbows, ballistae,
no guns-
and functioning robots. It was never an issue of "can't."