The same applies to me. I would have thought that to be the standard for every modder: in fact, I still have every safety copy from RoHT's development, dating back to July 2007.
On the 5 MByte limit: what mod is so large? The biggest mods in my setup are Havish and Beyond Ysgramor who both don't exceed 4.5 MByte.
Once you get exterior cells with land in there, size shoots up. That's why the ESMs for Morrowind and Bloodmoon are larger than Tribunal and most mods. A full Littoral-generated landscape is well over 20, I wanna say closer to 80 megs. I've seen files over 100 (huge exteriors).
Here's a link to the http://www.ageinc.com/Morrowind/Thanos_Tower/Download/ShadowsongCreatingESM-Files.pdf, hosted on http://www.ageinc.com/Morrowind/
Please note that that tutorial includes the same error as Pumaman's:
As stated above, that was, is, and remains wrong. After reading both Shadowsong's and Pumaman's tutorial, I suspect this to be a limitation only of the Construction Set (TESCS). I converted RoHT from esp to esm with Wrye Mash, and the resulting esm-file is capable of altering and deleting references from other esm-files.
The CS imposes a lot of artificial limits, although I think many are bugs in the saving process. ESMs load the same as ESPs, more or less, and load order is the main factor in what-does-what.