Enemies should have an appearance appropriate for who they are. Bandits looking like just regular people is reasonable, since that's what they are, sure, they're criminals, but they're still people, not demons or anything like that. So they're not going to have horns or whatever. They won't even necessarily dress in spiky black armor, after all, I'd imagine that bandits pretty much go with whatever equipment they can find.
With Dremora or whatever, it makes sense, given their nature, they can look in a way that suits their role, so if Mehrunes Dagon wants scary demons, he can have them.
Still, I would say that the designs of some major villians could be done better in future games, but I don't necessarily mean that they should look more intimidating, that depends on who they are and whether that fits their character. Let's say, for example, you have a villian who uses the player to do his bidding, one of those types of villains who the heroes end up trusting until the villain's true intentions become apparent. It seems to be a surprisingly common mistake to make such characters obvious villains, which always baffles me. It seems to me like with this kind of character, you really should be trying to make them NOT obvious villains, you know, make them someone you'd actually trust. That way, your protagonist doesn't look like an idiot to audiences for trusting a villain, since the villain really didn't seem like a villain at first, and unless the entire point is that the character really isn't very smart, or is naive and trusts people too easily, it is usually not a good idea to make your protagonists look like idiots in fiction. This is doubly so in video games because the player has control over the protagonists actions, and usually players won't do things that they know would be stupid if they're given a choice, thus forcing the player to trust an obvious villain would not only make the player character look like an idiot but would also force players to do something they would not do if they had a choice, which becomes especially annoying when that thing is being an idiot. Aside from that, if you make the villains people trust seem like people you'd actually trust, players might actually be surprised when they turn out to be evil. Revealing the guy with horns, blue skin, glowing eyes, spiky black armor and an evil laugh to be a villain isn't going to surprise anyone, but if the villain looks and acts like someone you could really see being on the heroes side, then that might surprise you. That's just one example, of course. In the end, villains should look their part, and this isn't even just true for villains, non-hostile characters should also look like the sort of people they're supposed to be. I also want the appearance of characters to have, well,
character. Characters should feel distinct and memorable, in both Morrowind and Oblivion, I felt that most characters really didn't do this well enough. When I looked at Caius Cosades, for example, he didn't really feel any different from any other Imperial, sure, I knew who he was because he was the only person in his house, and he also never wore a shirt, but there are lots of shirtless NPCs in the game, and really, despite being a character you'll be interacting with for a very large part of the main quest, if Morrowind had Radiant AI and he could leave his house and walk around Balmora, you probably would have a hard time telling him apart from any other Imperial. The same is true for most other characters too, sure, you knew who the character's were from their names, their locations, and what they told you in their backgrounds, but would you really be able to identify any given person just from looking at a screenshot if you did not know the context or see the name? I think in the case of Morrowind, a large source of the problem is the limited number of faces available, as a result of this, you get a lot of NPCs who look identical except with a different hair style and clothing. As for this issue being in Oblivion too, I think the problem is that the generated faces for NPCa don't really have enough variety, in overall look, and characters don't have any sort of unique features like scars or even proper facial hair or anything like that. Does, instead of clones so authentic that they even copy scars or tattoos, we get lots of NPCs who all look slightly different, but ultimately don't stand out much. Different apparel could also do a lot to make characters feel more distinct. The clothes NPCs wear should reflect their identity, occupation, and such, for example noblemen should have more expensive clothes than merchants, and priests really shouldn't dress the same way as mages. Some important people could even have their own unique clothing, like the Emperor's robe in Oblivion, only all unique clothes should be available to the player somehow, even if the only way is to kill the wearer, as I was rather annoyed by the presence of armor and clothing that the player simply could not get in Oblivion.
Now of course, in a game with over a thousand NPCs, you can't really make all of them distinct, and I don't expect that. I do, however, hope that in future games, Bethesda can do a better job at making important NPCs, whether they're supposed to be good or bad, feel like unique people. Maybe that sounds a little off-topic, but I think it still relates to the original point of the thread, since I've said that the appearance of NPCs should fit who they are. Which sometimes means that enemies don't always need to look like horrible monsters, and heroes shouldn't always look like angels.
Saints and Seducers looked like body painted teenagers... Human teenagers.
The only way Golden Saints looked any less human in Morrowind than in Oblivion was how atrocious the character models were in that game, thus making them look like manniquins, either way, I never got a demonic vibe from them in either game. Unless they were supposed to be demonically possessed manniquins, which might actually be pretty disturbing, but no, they were just models that suffered from the technical limitations of the time.
Though I seem to recall that I never saw a single Golden Saint who would speak to you in Morrowind, whereas in Shivering Isles, most were actually friendly, so Golden Saints were actually much more like monsters in Morrowind than in Oblivion, aside from the Dark Seducers, though, most other types of Daedra in Oblivion would attack you on sight, which I suppose actually sort of made sense in context, after all, they were the main enemies in the game, and there's not much point in trying to negotiate with mortals if you just want to kill them anyway. In essence, Dremora played the same role in Oblivion as Ash Ghouls, Ash Zombies, Ash Slaves, those naked Dreamers in Sixth House Shrines in Morrowind, and such, and sure, though you could speak to some Sixth House servants, its not like they ever gave you much choice but to fight under most cases. In the end, trying to reason with your opponent only works if your enemy is actually interested in hearing what you have to say and gives you a chance to say it.
I'd prefer one ending with several perspectives on how you get there. There should be perhaps four different experiences that lead to the same result, depending on the factions you join.
I think that would be the best way to handle this too. That way, they don't have to deal with the difficulties brought on with canon caused by multiple endings, yet they can still let the player have multiple paths in the game, and really, I'd say that's more important than having more than one ending anyway since the path you choose is what you'll be experiencing for most of the game, not the ending it leads to.
I think Bethesda needs to not care. They never make excuses for why in some universes the Hero of Cyrodiil is a Kahjiit, or why the Nerevar can be a Nord. Maybe I want to kill Martin Septim. They shouldn't have to explain what would happen if I did.
That's because they didn't have too, it wouldn't make any difference story wise what race or six your character was in the long run as long as you still did the same things, so they just kept the player character's true identity vague, which I think was the right choice. I don't want to have a future game force my character to be someone I'd never play, I'd rather just not be told who my character was so I can decide myself. But now if the player character did not save Martin and help him close the gates of Oblivion, that's the sort of thing that you can't really just keep vague, as that would completely change the future of Tamriel. Now, of course, Bethesda could just go with one "canon" ending and just say the other ones never happened, if they want to avoid resorting to a Warp in the West again. But if you're just going to make it so whichever ending you get doesn't matter once the next game comes out as only one ending really happened, I don't see much point in including the option to end the game in another way at all. Besides, if we go with the Oblivion Crisis as an example, I'd imagine that it would be pretty hard to reconcile letting the player continue playing after the end with an ending where Martin fails and Daedra overrun Tamriel, since I'm sure that Mehrunes Dagon would do what his sphere suggests and kill everyone if he suceeded, and continuing in a world populated only by Daedra bent on killing you would get boring after a while, I think.