Basically, I need to choose the order of importance of cities you build. Mournhold will be the capital, next city Vivec, then Balmora? I know there are lots of other mainland cities too. I need at least 12, preferably more. Suggestions?

Mournhold
Vivec
Balmora
Necrom?
Sadrith Mora?

Ald'ruhn
Ebonheart

If you need more ideas, look here: http://goo.gl/FZpv2

I know all the cities, I am just unsure about the order of importance.

Okay, now I need Dunmer heroes. I am thinking Indoril Nerevar (obviously), Divayth Fyr, Almalexia, Sotha Sil, Vivec, maybe Dagoth Ur. Any others?

http://images.uesp.net/f/ff/Racemap05S-Morrowind.jpg]This map[/URL] should help you with the major cities in Morrowind, plus the http://www.uesp.net/wiki/Lore:Morrowind]Lore article on UESP[/URL] has a list of all the settlements plus a bit of information on each.