Morrowind is the better RPG
I respect your opinion, but I actually consider Oblivion to be more of an RPG. Thats probably just because I'm a stealth character. The stealth is overall better in Oblivion, so I guess it just depends on what type of character you are. In other words, stealth is a strength for Oblivion and it happens to be my favorite attribute which makes Oblivion a more fun experience for me.
As for the lore thing. I don't really pay much attention to the lore which is why I forgot that Cyrodiil was suppose to be a Jungle, LOL. However, after reading these threads I'll admit that Oblivion screwed up a lot of the lore which I understand would make a lot of people who cared for the lore upset. Yet, I don't really know what to say about this. I guess you can compare this to when people go see a movie and hated it because they left so much good stuff out of it that was originally in the book(Which is why the books are usually better). Of course Hollywood, has to leave a lot of stuff out because of a time limit and they tend to change things to try and please a wider audience. Most game companies tend to change their lore to try and please a wider audience as well. For example, Blizzard also did this to their franchise, Warcraft. From what I've heard is that Bethesda thought that a more traditional medieval style for Oblivion would attract even more people which would make them even more money. I think they succeeded in that playerbase wise, but fanbase wise failed because they upset a lot of people who were into the lore and the story.
I'm not really sure what you want us to answer here, but I tried.