In order:
Immortal NPCs- In my Morrowind playthrough (and all subsequent playthroughs), I took the warning when I killed an essential NPC quite seriously, and immediately reloaded an earlier save. So in a way, they were immortal anyway, because
unless you want to completely ignore the main quest, those people had to survive Spoiler with the obvious exception of Vivec, but that was story-related and an entirely separate matter.
That underlined part isn't quite true. All that is required for the MQ is that the dwarf is alive to open up the backdoor into the questline. Then you can go finish off the MQ and then you're done. You don't actually need to go through the trials to finish the MQ. That being said, the point here is choice. In Morrowind, it was your choice if you wanted to live in a "doomed" world or not. In Oblivion, such NPCs are just plain immortal, for whatever sense it makes.
Quest Marker- Much like fast travel, it's an option for those who want to use it, nothing more. If it bothers you, don't use it. But I don't see a problem with adding a guide for people who aren't as "hardcoe" as you. [...] Video games don't have to be exclusive to a small, hardcoe niche in order to be good.
The point is, now you've got this nice little compass that magically tells you exactly where you have to go. Granted, it was a royal pain in the ass to walk around for days without finding the cave you needed to find, but more accurate directions would've been another way to solve this. Instead gamesas decided to simply point directly at where you need to go. Morrowind was an exploration game where you had to think and search unless you had access to a game guide. Oblivion takes that out and gives you the opportunity to just switch off your brain and follow the compas, GTA style. I realise you can decide to not use it, but it still very much demonstrates the change in gameplay. It's not like they couldn't have added place markers on the world map for all the hard to find tombs you have to visit, but they decided not to. Now, in Oblivion, they decided otherwise.
Horses- I'm not sure what you mean by anti-horse weapon. [...] There's no horse-based combat in Oblivion, so I'm not sure what the purpose of a specifically anti-horse weapon would be.
This isn't so much about gameplay as world realism. In a medieval world with horses, even if you're not going through the trouble of adding mounted combat, it seems very strange to have horses with armor when there's not a single anti-horse weapon around. Spears and polearms were widely used as anti-cavalry weapons. When the Empire is fond of using horses, how the heck can they have disinvented the polearm? It makes absolutely no sense. As such, it's demonstrates a dumbing down of the world. They've decided to ignore the freaking basics of medieval combat tactics.
Axes/Blunt Weapons- Their choice of words wasn't the best, but I understand what they were getting at here. Both axes and maces are heavy weapons, designed to crush as much as they are to penetrate. Lumping them together allowed players to try a wider variety of weapon types without being forced to level up a bunch of different skills.
ANd that's fine, but it's also totally unrealistic and very freaking lazy. It's not streamlining, it's dumbing down so players aren't limited as much by the choices they make, despite the entire freaking point of an RPG is choice and consequence. Morrowind was already rather light with respect to "consequences". Oblivion takes it totally out of the picture.
Daggers- I don't even understand what you're getting at here. Even in Morrowind, daggers were essentially the same as any other blade, just faster and weaker. If anything, I could see you making an argument about them removing slash/chop/thrust weapon values, and I would concede that that was probably a mistake, but I don't know whether that's what you're trying to say.
Do you think using a dagger is remotely the same as using a two-hander? Of course it isn't. The problem is that when there's only one blade skill, the implication is that a character that trains a lot with a butter knife will learn the ins and outs of fighting with a two-handed sword, eventually well enough that the character is a master at it, even if he's never held anything heavier than a butter knife. As before, this implication is plain silly and it ruins your suspension of disbelief if you think the least bit about it.
Levitation- It annoyed me, to be honest. It always felt like I was just turning on noclip and cheating my way across the map, and I never used it except when I absolutely had to, like getting into the Telvanni towers. So I really don't mind that they removed it.
You're missing the point. I don't actually give a rat's ass if I can fly or not, but levitation forced the devs to design the world in a vertical perspective as well as a horizontal. They had to think in 3D and put in various secret places that you wouldn't notice. Without levitation, the designers could skip all that entirely. Now they only have to design a ground level and not think about vertical secrets and whatnot. Similarly, you now no longer have to worry if there's a place hidden somewhere around the roof. If you can't reach a place by jumping, there's nothing there, guaranteed. Makes it a ton easier to be a world designer but also means the game world becomes a lot more senseless.
It ultimately boils down to personal preference. I like the action-oriented gameplay of Oblivion, but if you prefer Morrowind's, then I'm not going to spend an hour trying to convince you you're wrong.
It has little to do with preferences. I'm not trying to convince you that Morrowind is a better game. Such evaluations are subjective and it would make no sense to argue over it. It's like me saying that heavy metal is better than rap or classical music. What I am saying, and what is worth arguing about, is that gamesas intentionally dumbed down Oblivion to fit with the action gamer segment. A segment you're part of, and which doesn't really give a flying crap about the finer details of the game world. As long as the graphics are shiny, the combat is player-based and action-intensive, and the story doesn't require too much active thought, you're completely satisfied. That's fair enough, but it's also exactly what people mean when they suggest that Oblivion was dumbed down.
Let me round off by repeating that I don't think Oblivion was a bad game. Being dumbed down doesn't make it crap, it just makes it less convincing as an RPG.