Where do I find all the folders and files for Morrowind and the expansion packs to use in the construction set? There's an activator or two that i'd like to copy as a static, but I assume I need the proper meshes/textures to do so.

They are on the CS disc and also packed away in their BSA in your Data Files. (it is often quicker to just grab them from their BSA.)
You'll need a BSA browser to do so.
http://planetelderscrolls.gamespy.com/View.php?view=Utilities.Detail&id=32

I don't really get how it works... can someone explain?

The BSA Browser?
- Install it to your Morrowind folder (actually it probably doesn't matter where you install it)
- double click the BSA Browser icon, wait
- when the program opens, click File->Browse BSA Files
- your Data Files folder should open, double click on the BSA you want to browse (you should see one for Morrowind, Tribunal and Bloodmoon... and any you might have from mods)
- wait a minute or two as it loads
- search the file tree until you find the file you need. Double click it (or highlight it and press Unpack)
- the file will be copied and stored in a folder in your BSA folder.

I feel so rude for saying this, but when I double click the icon, it just opens the help files. I opened bsa_browser_v10 and clicked browser.

BSA Browser is the name, not Browser (as I said above.)
It's the one with a magnifying glass icon.