Hey I need some questions answered for my upcoming RP, they are not huge Q's at all though.

Question 1: Do people smoke tobacco?
Question 2: Is there tea in the TES universe?

There is tobacco in Oblivion. In Morrowind, some NPCs used skooma pipes to smoke refined moon sugar. While I do not think there is a direct incidence of tobacco smoking, it is not unimaginable.

I have never seen any evidence for tea.

Smoking is practiced and tobbaco exists in Tamriel. But there is no exact information.

There are definitely exists some alike beverages prepared from the different plants. Don't sure about the tea plant.