Story>Gameplay>Graphics in my opinion. Now wait before I'm yelled at. They should always focus on the first two, before the third. Always. If they have six months to do it and no new engine in this hypothetical. They should grab the Oblivion Engine, modify it to allow levitation and open cities, and work on the game-play and story. Why does every game need to have cutting-edge graphics now?
Let's get a few things clear. For one thing, graphical progress has been a gradual change that's always been occuring. It has nothing to do with now, it has to do with the advance of technology and the advance of the video game community. No, but you're right. Graphics aren't important, so we shouldn't have even bothered to progress past Pong's graphics... or better yet, we shouldn't have added graphics to games and started calling them video games in the first place, right? You see where I'm going with this?
On another note, Bethesda has pretty much always pushed the boundaries on graphics and technical aspects, in general. Arena was a pain to get running on computers of its day. I'm not sure about Daggerfall, but Morrowind was cutting-edge, too, and so was Oblivion. It has nothing to do with now because it's just been happening. Graphical advancement is a constant throughout video gaming history.
Another part of this is that graphics typically aren't alone. Oblivion's engine is largely unoptimized. They needed to make a new, more optimized one , in my opinion. Better graphics come as a by-product of more advanced gaming engines which, in turn, allow for more advanced physics, animations, graphics, sounds, AI, day-and-night systems, weather systems (part of graphics), optimization for a smoother running game (Where was occlusion culling twenty years ago?), the potential for better gameplay, and just more stuff, in general.
Now, I would like to ask a question. For what purpose do people oppose the very foundation of what separates video games from other types of games? Why does it seem that picking on graphics and the modern day is considered a "cool" thing to do on the internet? We have a freaking hand-held console able to run PS3 games, now, and how can anyone possibly say they don't care? If Skyrim has a view from the peaks of one of its mountains that will both leave your jaw dangling in awe and make you acrophobic at the same time, would you not be impressed? I've stated this before, but from an objective view, graphics do matter in a video game. My reasoning:
graphics = video
gameplay = game
graphics + gameplay = video game
That is a truth that cannot be denied. If you personally disagree and honestly think story is more important than either of them then, and I don't mean this out of anger, I think what you're looking for is a book. I read plenty of books, myself, but the premise of video games does not rank graphics as meaningless nor does it place story above it's two key elements. Video game stories have always been weak in comparison to stories from other forms of media that are based around the focus on stories... such as books. I'm sorry, but it is the truth. :shrug: