Oblivion's conversations are just as repetitious as Skyrim's. The difference is that in Oblivion the NPC banter is generic, whereas in Skyrim the NPC banter is specific.
In Oblivion, outlaw bandits in Ayleid ruins speak exactly the same banter that aristocratic NPCs speak in Talos Plaza. This frankly just kills immersion for me. And, my god, they speak these lines over and over and over and over, everywhere in the game. One cannot get away from it. More than once I have turned my speakers off when I entered a town in Oblivion, so that I won't hear those same comments about Mudcrabs and syndicates of wizards. Skyrim's banter repeats too, as you noted, but at least the repetitions in Skyrim are confined to a specific location. We are not forced to hear the same generic banter from every NPC, everywhere in the game, all the time.
Skyrim is full of arguments, disputes, agreements, between NPCs. You hear them talking to each other everywhere you go.Talking to each other, not just talking. I feel as though I am surrounded by NPCs who have real stories to tell, who have hopes and dreams, who have done things in the past or who dream of doing things in the future. These stories and conversations combine to make Skyrim feel more real and alive to me. This dialog is specific to the characters who speak it.
When I pass by two NPCs tending to crops I hear them talk about these specific crops, in this specific field. Family members have arguments about issues that are specific to those NPCs only. You hear their stories, they feel a lot like real people with real issues. After I have finished trading at Riverwood Traders I feel like I know Camilla and Lucan Valerius. After I have finished speaking to Jensine in Jensine's "Good As New" Merchandise I do not feel as though I know anything more about her than when I went into the shop.