Argonians aren't lizards, they're dinosaur-types who are descended from trees (in the sense that their ancestors are trees, not that their ancestors "came down from the trees and walked on land").
..
Khajjits also range from wood-elf looking with cat ears and tail (imagne typical anime cat-person), to large 4 legged cats with absolutly no human features at all.
And even among the four-legged ones, they range from giant-tigers-who-other-Khajiit-use-as-warhorses types, to mute-magic-using-housecat-sized cats.
edit: Also, was The Argonian Account ever said to be anything but fiction? It might be "poetic creativity" along the lines of the first Pocket Guide to the Empire.
The only use I've found with the Khajiit racial is with quests that involve h2h'ing people. The night eye is pretty useless simply because no area is too dark (that I have come across yet) and the effect seems to make it harder to see than easier.
I use a darker dungeon mod, and Night Eye doesn't actually make it any easier to see in dark areas

looks like all it does is wash out the screen and add that blur.