Only just now discovering Elder Scrolls...I note that III and IV are available via steam...any chance that I and II could be re-mastered using the new game engine?

I see used copies on Amazon, but I'm sure a lot of fans would love to have the old games reworked and upgraded.

Download them for free from Bethesda. (You'll need a DOS emulator like Dosbox)

http://cms.elderscrolls.com/sites/default/files/tes/extras/Arena106Setup.zip
http://cms.elderscrolls.com/sites/default/files/tes/extras/DFInstall.zip

I don't think they will ever do that. They've released them for free, and there are some good tutorials on getting them running, but unless they get a third party involved, I don't think they will ever do a remastering or anything.

No it's doubtful. A third party might though.

I have DOSbox installed I think...Dungeon Keeper and Dungeon Keeper 2 use it...does it link to DOS games automatically or will I need to tweak the shortcuts to use it?

Here's a tutorial
http://www.youtube.com/watch?v=TtZLLZ74etQ

Better yet, people have packed them into installers that will configure dosbox, make a shortcut and patch the game (The UESP wiki links to these):
http://theelderscrolls.wiwiland.net/?title=Arena_:_ArenaSetup_EN
http://theelderscrolls.wiwiland.net/?title=Daggerfall_:_DaggerfallSetup_EN