so is it just an oblivion thing that I can kill necromancers out in the woods like bandits? Or is the cult of the worm king like liches?
It's a shallow oblivion thing to give the MG a shiny face of goodness, while necromancy is black, evil, and nothing but a bunch of puppy kickers. Usually, necromancers study their art as a form of magic and anatomical research. The anatomical portion is how a dead body works, performs, and how well it can be preserved. It's very much like studying dead bodies today. The magic part comes with reanimation of a dead body and the control, nothing more really. And no, things like disease, poison or any of that rubbish doesn't fall into any category of necromancy, that's destruction magic right there. Read On the Preparation of the Corpse, that's what necromancy is really all about. Also, the dead can make good servants and guards, depending on how well you prepared the body, and how intelligent the person was in life. Animals are, at best, guards. At worse, they attack the reanimator.
also, if I were to put a necromancy shop in the market district of the imperial city, lore-wise it wouldn't be illegal?
You couldn't sell bodies, unless you had people willingly sold their corpse for cash should they die. I doubt if someone was tugging a corpse behind him, without any official papers, it'd probably be illegal to buy it, since for all you know that could have been a murder victim you just bought or a grave robbed body. Also, there is the chance that the body you just bought from Mr. Shady could have been a dug up a body that had the blessing of Arkay, which would prevent reanimation. It would also have to be in an area where superstition won't be the determining factor if you should be hanged or not; the peasantry will fear you. Also, such a shop would include leather straps, metal spikes, preservatives, linen bandages, salts, needles, stitching, and any other materials used to strengthen, repair, and anything that would be associated with preparing a corpse.