I downloaded this game yesterday so see how much i would like it. So far its much larger/more complicated that Oblivion which i expected.

but back to the subject

Following the tutorial, I went to the town daggerfall. i couldn't find an inn for the first night so i stayed out at night. every now and then i got a message at the top of my screen "wraith/ghost just died". Following that, i repeatedly get the message "vengeance" played to me. I can't kill the wraith as I just have an iron longsword, and it keeps following me through the town until it randomly dies. then crops back up again in a few minutes.

I can't loiter/wait/rest as there are apparently enemies nearby.

how do i get rid of this thing? and where did this come from?

That's due to the haunting the emperor sent you there to deal with. You can't get rid of them for now except by getting off the streets of Daggerfall city at night. Inns are always green on the map; I don't remember if the wraiths can follow you in the door but no new ones should come after you once you're indoors.

did you listen to the emperor at the beginning? Lysandus is haunting his former capitol with an spectral army and that is what you is seeing now. i'd urge you to either find another town to rest in and only visit Daggerfall when you are ready or only venture into town during daytime.

and you cant kill it, since it will just respawn. you have to clear a quest later on to get rid of those wraiths.

The wraiths don't appear to follow me indoors, but the message "there are enemies nearby" does.

Alright this clears things up. thanks

While I'm here I may as well get another question out of the way.

The tutorial mentioned I can swap between weapons by pressing the H key. How do I set these two weapons up? I'd like to easily switch between a bow and a sword.

You can't do the quick switch between a bow and anything. It only works for two one handed weapons. It's a little frustrating, and is the reason I avoided using the archery skill for a very long time. But archery is worth the annoyance :>

But to answer your question anyway, if you have two one-handed weapons you can equip both of them in your inventory screen. The H key (if that's what it's set to) will let you switch which hand you're using. Sadly, the animations don't depict this correctly at all.