The way I enjoy playing Oblivion, is probably different than most. It's is a type of RP style I suppose, though I do not spend time eating, drinking, sleeping etc- that is not the focus. It is more of an anti-meta or anti-powergaming style of a challenge that creates more specialized characters. Ironically, it also seems to be the opposite direction Skyrim is going now that classes are getting axed which has me a little worried. But, I suppose that is for another topic.

This is what I do:

-Play through the intro and roll with whatever class is chosen for me
-Use ONLY major skills when playing the game
-Minor skills can only be leveled through trainers (helps offset the leveling system slightly)
-Tweak the difficulty level slider as the net difference between level and quests completed. For example, if my character is level 1, and I have completed 5 quests, I increase the difficulty by 4. Inversely, if I am level 5 and have only completed one quest, I turn it down by 4.

This has worked really well for most characters, but the one issue I have run into is mages that do not have "mercantile" as a major skill since buying spells increses that skill. The other very minor one is characters without acrobatics that need to jump at certain times- but this is very minor (and levels very slowly). I suppose I could overlook it and give it a pass, but was wondering if anyone has any creative ideas, or if there is a mod that addresses this?

I just play the vanilla game in a natural way. No mods or tricks. I carry a lot of health potions around and find that generally helps.

I find that waaay too easy. I also don't like to have my melee-focused knight flinging around fireballs like a boss, for example.

The other thing this does, is really makes drops such as staves, scrolls and potions very valuable since I can't just stock up on these things with characters that don't have mercantile as a major skill. The staves and scrolls are the only magic I allow my characters that don't have any magic skills as majors.

Makes it more specialized (and interesting) for me. I just need to find a workaround for obtaining spells without leveling up mercantile. Maybe I can make it to where I can level it only after I have used up all 5 training spots for that level....

There are many spell effects that can be gained without buying spells. For example, if you visit the Serpent Stone at night, you will get a power that uses paralyze and damage health. This puts those effects in your spell book. Once you make spells with them, you can visit another birthsign stone and pick up a power like open locks (forfeiting the Serpent Stone power). If you study up on doomstones, gaining special powers and follow this logic, you can pick up quite a few spell effects. Completing the Orrery DLC for example with give you the 'Drain Attribute' ability. You can gain some powers via some of the SI quests as well.

Thanks Acadian, I like those ideas actually. Looks like I'm finally ready to make a run with a mage character.