Have to agree on the need for some scaling. Some gamers treat becoming God-like as a reward, but as you say, the challenge ends. Not sure about 1/3 hand placed loot, keep the interesting stuff rare, imho.
The trouble is OB could so easily have been different with Very Few static enemies, can't get the Honourblade until you can kill a proper ogre, Mannimarco accompanied by dread zombies whatever your level etc. etc. Only a few situations like this would have changed the whole game.
Pretty much that. That's a vast majority of why I don't like Oblivion over Morrowind. It was the fact that there was no sense of actual exploration. Just some guy walking down the street and somehow fighting people who were pretty much all weaker than him but not significantly so and then finding just kinda whatever stuff that didn't really help him very much. Like finding the Fists of Randagulf in Morrowind? "OMFG 20 STRENGTH?! THIS IS AWESOME!" Oblivion? "So....this shirt enhances my speechcraft by 2....right, well, I think I'll just keep my fine assortment of forks and plates." Basically needs more legendary artifacts worth finding and stop being so incredibly stingy with enchanting for Christ's sake.
And the level scaling? Yes, definitely needs to be some though I don't quite know how I would go about it. All I know is that my most vivid memory from playing Morrowind is finding the incredibly epic (at the time) Vassir-Didanat mine and just looting all the ebony over and over again. Probably my 3rd trip back I wondered down the wrong side tunnel and ended up face to face with a Fire Atronach who then thoroughly [censored] my face from my skull. Guess what? I didn't mess with him or anything that looked like him for at least another ten levels and every time I went into the mine I was always looking down that side-tunnel to make sure he hadn't spotted me and was waltzing on over to thoroughly demolish my no doubt borderline overburdened self. When I got a whole lot more levels on me I came back and figured maybe now I'd put up a decent fight....yeah, not only did I put up a decent fight I totally trounced the creature that had been the stuff of nightmares not even a month before. Which was pretty much mindblowing to me given how many times I'd tried going back to kill him before and utterly failed. See, Oblivion has none of that. There are no creatures who the very sight of will send you running back towards the nearest town if not just as far as it takes to make the battle music stop. And so long as this is fixed along with a decent storyline and maybe a throwback to when you could wear about 90 different pieces of clothing at once( That's just good customization, honestly)....yeah, it won't be Morrowind or Oblivion but it'll have all the things that made them great in their own way (Oblivion was so good at being a pretty face).
With that ludicrously large mouthful being said. First post. Feel free to welcome me with open arms. I totally won't stop you.