Okay, here are some in-game quotes.
On the topic 'Vvardenfell':
From the book 'A Short History of Morrowind':
Only recently open to settlement and trade, most of Vvardenfell's population is confined to the relatively hospitable west and southwest coast, centered around the ancient city of Vivec and the old Great House district centers at Balmora, Ald'ruhn, and Sadrith Mora.
So there were some Great House settlements there before the island was opened up to Imperial colonisation. On the other hand, Athyn Sarethi has this to say on the topic 'Bolvyn Venim':
This implies that Ald'ruhn may have been settled rather more recently - though given how long Dark Elves live, it's quite possible that this happened a century ago or more.
Add in the Ashlander settlements and of course all those 'brand new' Velothi Tombs?
You know that Redoran are Warriors, Telvanni are Wizards? Guess what Hlaalu are? ... and Imperials feel that the Hlaalu are just like them. So what does that make the Imperials? Now if you accept this then how reliable as a source of info would you think the PGE and other Imperial propaganda documents are?
Communication skills = lies.
So let's look at that document you quoted Helena and in the Grand Imperial manner re-write it:
From the Imperial propaganda book 'A Short History of Morrowind':
Only recently open to 'Imperial' settlement and trade, most of Vvardenfell's population is confined to the relatively hospitable west and southwest coast, centered around the ancient city of Vivec and the old Great House district centers at Balmora, Ald'ruhn, and Sadrith Mora.
Centered around - that indicates that there are other settlements, but that Balmora, Ald'ruhn and Sadrith Mora are indeed old - read predating presumtuous Imperial Invaders and they are centers of population but not all the population was there. See they are District Centers - so they administer to the district ... What happened to the rest of the inhabitants of the District? Mostly killed off by blighted creatures etc I would imagine. Note also the Ashlanders. They were part of Vvardenfell from before the Tribunal. Note the Urshilaku Burial Grounds - again Ancient. What a lot that pathetic excuse for a tourist guide written by a parvenue missed.
Now this book contradicts itself as follows:
From the Imperial book 'A Short History of Morrowind':
QUOTE
In 3E 414, Vvardenfell Territory, previously a Temple preserve under Imperial protection, was reorganized as an Imperial Provincial District. Vvardenfell had been maintained as a preserve administrated by the Temple since the Treaty of the Armistice, and except for a few Great House settlements sanctioned by the Temple, Vvardenfell was previously uninhabited and undeveloped. But when the centuries-old Temple ban on trade and settlement of Vvardenfell was revoked by King of Morrowind, a flood of Imperial colonists and Great House Dunmer came to Vvardenfell, expanding old settlements and building new ones.
What is this - first there are ancient centers with population surrounding them and then it appears only a few settlements ... and ofc NO ASHLANDERS
Anyone playing the game can see that Balmora was built of a piece. there was no expansion outside the city walls ... you might suspect that there is something fishy going on here. And indeed there is. A short way up the river is an ancient Redoran mine called Caldera - that the Hlaalu want to steal and with assistance from their fellow Imperial thieves, using Imperial propaganda backed up by the content of a short History of Morrwind to reassure any dupes that there was no real Redoran claim to that extremely valuable source of Ebony they gain an Imperial licence to land that is not and never was theirs. Cheaply bought.
And so it goes on.
QUOTE
How can I explain the hold he has over the hearts of the Redoran people? He brought us back from certain defeat. He moved the council here to Vvardenfell and took our share of the frontier lands.
The entire story is that Ald'ruhn was ancient and the Redoran moved their HQ from the mainland to that great City to be in the forefront of the offensive against Dagoth Ur and to escape being swamped by the Imperials and their running dogs the Hlaalu on the mainland. But even on Vvardenfell they could not find freedom. It was a ploy. However they had also absorbed a lot of Imperial Propaganda during their time on the mainland and so they see Vvardenfell as a frontier - Ignoring the fact that Ald'ruhn and many Dunmer settlements in the area date back to Old Resdayn - and that predates Vivec and co. There you have the other foot landing. Betrayed both from within and without.
Have you not noted the Dunmer Forts? The Tombs, The Dwemer locations, the 'abandoned' settlements etc. The Empire in cultural terms appears to include a fair bit of genocide and Vivec is party to that possibly following in Dunmer footsteps. Note near Azura's Statue and Shrine there is an genuinely Ancient Tomb - that of King Harold. That predates just about everything on the island.
Look again at the activities of the East Empire Company on Solstheim and Imperial expansion generally and what you will see is that the Trading companies are used as a wedge to prise open native lands and resources for Imperial expansion and settlement. There is no great gift of technology here. The cultures that these Imperials invade and destroy are often technically superior to the culture of Cyrodiil - just different.