I was just thinking how cool creature forms would be. Think of how awesome it would be to morph into a wolf for faster travel speeds, or some kind of sea animal for underwater breathing.

On the other hand, it doesn't seem like it would work out with the combat system, as animal forms are usually specialized for a specific role, which wouldn't work out well with a game such as Skyrim. For this reason I doubt it will be in the game, and I think it's pretty safe to say it won't. But if it did make it in the game, it could be used for non-combat tasks such as traveling or special objectives in quests (like disguising yourself as a goblin to infiltrate a dungeon).

If nothing else, I think it would be a cool feature to have available in the Construction Kit, so that modders could play around with it.

So do you think this would be cool? Or is there a reason why it wouldn't work?

the water breathing thing wouldnt be good. it would defeat the purpose of the Argonian which is my personal favorite species

You're acting like water breathing is the only reason to play as an Argonian. It's like saying that a transformation that resists cold defeats the point of Nords, or that a transformation that resists magic defeats the point of Bretons.

im not trying to imply that at all. Im just using the specific example that th OP mentioned.
i do agree with you though, that is most definitly not the only reason to play as the best race in the game

heheheh, it's definitely an interesting idea, but i'd prefer it if the transformation thing was SERIOUSLY limited, e.g. werewolf. the werewolf is not initially a desirable trait, more like something you make an extra save for, and when you do use it you can only use it during specific periods.

Maybe for conjuration, the player could morph into some spirit forms that end when you're attacked.

Polymorph was under illusion in Daggerfall, though conjuration wasn't in Daggerfall.

Already defeated by items that provide water breath and none of them were hard to provide - some of the easiest quests sometimes even no quest. I like the idea it would be a great feature but nothing I would cry about if it is not implemented.