I have to disagree with being able to do all quests as a Lich. The church of Arkay hates Necromancy, Undead and Vampires so if you become a Lich and there a joinable faction the next game you shouldn't be able to do their quests. That's not to say you can't do that quest line you just got to do it before becoming a Lich.
I agree. I don't understand why people want to be Liches, but it shouldn't actually affect the game. Becoming a Lich takes time, so you probably have done many quests before becoming one anyways.
If there are any stages to it, being able to walk around cities as a full Lich should require master level illusions, maybe some power you can find and learn while being a Lich. Liches don't actually need merchants or peasants or anyone else either so avoiding cities and only having people flee or attack sounds fine. What does a Lich do with sword and money? Especially when you have the powers to slay the merchants.
It would bring godly powers with the price of loneliness, and some decreased attributes. I like the idea of entering a city, chaos breaking out as I see everyone escape or attack me. After I defeat them, I see the town is almost abandoned, my kingdom. It would also be fun and believable to have just a very few NPC's around who will stay, unless I choose to kill them too (People who want to become liches, worship liches, are too afraid or depressed with their life to flee or fight me)
I could create a ghost town, summon undead to fill the city. Maybe the fleeing people would inform other cities and they would send some troops to take down me and my army.