Mountains help exploration because the limit the speed that one can travel, and also give the illusion of larger lands. A If you have a mountain between two cities, it suddenly takes over 2 times longer to travel between them, making the distance seem greater. This lets developers stuff more content around mountains without it making it seem like the area is over saturated. If you put 2 cities right by each other like that on an open plain, their proximity would be extremely obvious and immersion breaking.
Hence why when Hannibal invaded through the Alps, which were formerly a "huge barrier" for an invading army going into Italy from the north, when in reality, the distance is tiny compared to a straight sail from Africa to Rome. The historical significance is there because terrain does make the world seem bigger and take more effort to traverse....because it does IRL.
Consider an Imperial army attempting to attack Whiterun by heading due north, instead of first taking Dawnstar from the sea, and marching south. The Nords would be more surprised by the assault over the Throat of the World, than an assault from the North by way of Dawnstar or from the East or West.
OT: I think the mountains will have pros ond cons for exploration. I know I had mixed feelings about traversing Cyrodiil's mountainous areas.
Also, holy f***ing s**t, Batman! Daggerfall was 62,394 square miles?!?! That's ridiculous! Can you imagine if you could literally explore every part of that in a game today??