I have read that the mix-race looks like the mother - but I am wondering if a mix can inherit talents/abilities etc from both parents according to Lore.

I believe so. This book gives a little bit of an explaination:

http://www.uesp.net/wiki/Morrowind:Notes_on_Racial_Phylogeny

Now, that book seems a little outdated and might have some cultural bias in it. (It says there have been no documented crossbreeds with Orcs while we meet one in Oblivion)

But this is the part I think will help you the most:

"After much anolysis of living specimens, the Council long ago determined that all "races" of elves and humans may mate with each other and bear fertile offspring. Generally the offspring bear the racial traits of the mother, though some traces of the father's race may also be present."

So in my head, I would picture an offspring like that as looking like the mother with maybe some watered down abilities and physical features of the father. Others may disagree however... hope this helps

It's all a matter of dispositions, which is translated in gameplay as racial bonuses.

The abilities and talents are a matter of gameplay.

The entire race of Bretons are a prime example of what happens with mixed race. The first "Bretons" were the product of Direnni Aldmer and their Nedic concubines/slaves. They look like a race of Men, but have quite a bit more arcane affinities than the other races of men. Eventually, over time, the number of these mongrels outnumbered their pureblooded parents and the region of High Rock effectively became theirs.