Because they thought the hair looked cooler? It's a retcon, pure and simple; no real explanation behind it.
Now:
Go into your DOSBox folder (probably C:\Program Files\DOSbox) and find your dosbox.conf file. Right-click, select "open with," select "choose program" if it asks, and then open it in notepad. A readable document with a bunch of variables and numbers should come up.
Scroll all the way down to the bottom and find the [AUTOEXEC] section. After the comment line (indicated by the #), type verbatim the command prompts you'd normally type to run the game. Then save. This will run those commands automatically for you upon running DOSBox.
Then search for the [CPU] section. Change the line "core=auto" (or whatever it's set to) to "core=dynamic". Save. Try running DOSBox. It should run Daggerfall automatically. Now, while you're playing, raise or lower your CPU cycles (ctrl+F12 and ctrl+F11, respectively) to see what number of CPU cycle gives you the best performance. When you find that sweet spot, Alt+Enter to go to fullscreen, where your CPU cycles should be displayed at the top; take note of that happy number, open up your dosbox.conf in notepad again, go back to [CPU], and replace whatever number the "cycles=" is set to with your number. Save. Run again.
If all else fais, you could reduce your level of detail, I believe, in the game's options menu.