I was playing a lot of Demon Souls recently and I was wondering if it might be possible to alter the combat of Oblivion to be similar to Demon's Souls?

I noticed that attacks in Demon Souls do a lot of damage and most attacks cause a lot of visible staggering. This occurs for both the player
and enemies. This makes it so that if you attack someone, you can kill them pretty easily. Alternatively, if you're attacked you can die a lot
more easily. This makes it so that you need to keep up your shield a lot in order to deal with most enemies. However some enemies can keep
striking at your shield until you run out of stamina, break your guard, and then kill your exposed spot. The balance for this being that their
attacks take a lot of stamina to execute...

Oblivion by contrast allows for a lot longer battles. The damage values are low for both the NPCs and the enemies you face. Enemies don't
get staggered often, and even if you stagger an enemy, the damage you do after a strike is pretty low.

In my mind I know how the two relate together and could work together...but I'm mostly just wondering if these attributes can be edited in a global way:

Stagger Chances, Stamina Consumption, Stamina Deduction on Blocking

Also, I noticed that in Oblivion if you block an incoming, attack the enemy will always go into a stunned state after their attack to allow you to counter.
Is there a way to make it so that if an attack is blocked, but the strength of their strike far outweighs your blocking potential the animation will continue
without incident?

Oh also, I'm wondering if Demon Souls' "shield parry" could be supplemented with an on time block.

Have you tried Duke Patrick's Melee Combat Mod? From what I played of Demons' Souls, the changes it make do make it closer to that. Also...