Two, Alessia isn't mean to you
No, but she inspires others to do what they can, whenever you can simply because of your race. And that's because the Imperials aren't as honest as the Dunmer. Can anyone here think of a time a Dunmer has lied?
Three, Valen doesn't hate Dunmers, you can look up his dialogue if you want. He was being nasty to you if you were a dunmer, like everyone else, but his dunmer taunts weren't race-based like the others
I've never seen Alessia Ottus insult Imperials. She does insult some classes, but most of the lower class are not Imperials, and neither are most Arena fighters.
Anyways, Valen wasn't as annoying as the dudes in Balmora and other places yelling, "N'wah! Fetcher! Outlander!' Really, those guys hurt my feelings.
He is about as annoying, then, as the people in Oblivion who shout:
'You'll make a nice pair of boots, lizard'
And about ten other racist insults I can think of.
And really, between the Dunmer nobility and the Dunmer Temple clergy, they've got like a million of her.
They usually keep their opinions quiet, or only tell them to the player character. I've never seen anything published in Morrowind by the nobility or the Temple that is obviously racist.
And what you don't have is torture chambers and other things established by Alessia Caro, and the residents of Leyawiin who demand the eviction of any non-Imperials.
also, the place is ruled by imperials, which means that the men are supposidly "dominant" over the mer
Every province has a group of people, usually in a large area, such as the Alik'r Desert, who do not subscribe to Imperial domination, and many provinces were never conquered by force. And without the Armistice, Tiber Septim (who was a Nord) wouldn't have been able to conquer most of Tamriel.
EDIT: I know I've got something wrong there, but it's not that significant.