Other mesh/animation formats? Does this mean that we will be able to create new, smoother & much better looking body models? Better Bodies was made in 2003 at PsychoDog Studios and has since been the only body replacer. I would love to be able to create, or see created, new & improved body models. That in turn would mean we'd have to make new clothes, but hey, they did the same thing with TESIV.
I'm not sure if the NIF format is preventing modders from making good looking models. AFAIK, it still has vertex weighting and normal maps and such, so as long as there isn't a vertex limit it should be fine. But it means it'll be able to use well documented mesh formats, instead of needing to use NifSkope to convert to a reverse-engineered format (such as Ogre's own native .mesh format). Adding new features to well documented formats should also be easier.
Not sure what you mean by 64-bit builds.
I mean a proper 64-bit executable. Original Morrowind is a 32-bit executable, and even when run on a 64-bit OS, it's limited by the 4GB address space, and can't access 64-bit CPU extensions. With OpenMW, a proper 64-bit executable can be built which can access more than 4GB and get at those other CPU features.
Now when you say "tesselation", are you saying Morrowind could have the potential to look like the http://www.youtube.com/watch?v=9F6zSgtRnkE demo, given the right people implement the right kind of modding and tweaking to the open engine?
Given people who can make the necessary assets and do the proper coding, yeah, it should be possible. Though the biggest hinderence to modding is often the lack of people able to make high quality assets, so without those high quality assets, it may not come out that good.