I've found out that some mechanics in the game are hardcoded and can only be modified in the codebase (how MCP made h2h strength-based). I'm wondering how I can get to the codebase (decompiling the exe maybe?) and start some modding. Also is it illegal?

I believe so. As an example, just last week someone uploaded a tweaked Skyrim .exe and he is now banned from the forums.

Eh, I don't think you'll go far with modifying the Morrowind Executable itself, but luckily OpenMW exists and isn't hardcoded.

Thanks, I'm checking out OpenMW right now.

Not exactly. Redistributing the exe, even if it's modified, is illegal and against the ToS. However, if you create a patch like Hrnchamd did with MCP then you're not actually redistributing it, which skirts this rule.

As for how it's done, I had asked Hrnchamd in PM a while back how he did the MCP, I'll see if I still have the response.

EDIT: Unfortunately I don't have said PM anymore. I'd recommend asking Hrnchamd about it yourself if you're curious.