It is really sad that death is the only option in this game.
Indeed. I would like to at least have the option to offer cake, and let there be a choice: Cake or death?
Seriously, though, once you get your sneak skill high enough, combined with spells like Muffle and good ol' Invisibility, stealth is no problem.
You could also become a vampire, they get bonuses to Illusion magic casting and sneaking. I was able to sneak past people and pick their pockets in broad daylight, at times. Cured myself, though, because of too many times fast traveling to a new location only to find myself at full vampirism and immediately slaughtered upon arrival.