what is the difference between different arrow types?

is it damadge?

For low-end arrows, it's pretty much all the same. But for the high-end arrows, the damage and weight change a lot.

Have a look http://www.uesp.net/wiki/Morrowind:Bows_and_Arrows for more detailed numbers.

Of course, if you add the mod (if you are playing on the PC) that adds the Fletcher in Vivec, then arrows are your oyster. There are shock, fire, frost, dire, silver, all the stock types, and various bows of various levels. One of my favorite mods.

If just playing the console version, all I can say if it is Game of the Year edition, go to Solstheim and survive to Thirsk, and look for that hollow tree stump behind the Mead Hall. Like a gift from the Gods it was. Or, find the Vassar-Dinandat mine (all you have to do is step inside and walk right back out. It makes a tag that is certain NPC specific, but save that information (the mine's location) until you find the reclusive Bram Bero, in the Haunted Manor of the Vivec St. Olm's canton. He will reward you most handsomely for information leading to that mine. ; )