Realistically? Most have settled with the dragon representing Akavir. Yes I believe there will be
a dragon, but i think it will be like the fragon from Merlin - an advisory capacity, get quests from it (sure if you're strong enough maybe kill it) or perhaps a clan of maybe 5 or so dragons. - So no to the riding a dragon idea.
But for transport, Horses, carriages, other means of traversing land. I think they should abolish fast travel BUT have these alternate types of transportation (like stilt striders from MW). Going into your menu and clicking somehwere to appear there isn't very RP'ish is it? But going into town and paying for a boat ride, carriage ride somewhere definatly is. It would also encourage people to ACTUALLY explore the world BSG have spent so long making.
The best part of Oblivion was not using fast travel, and walking places, sometimes going off road just to have a wander, and coming across goblin caves or dungeons (admittedly, the dungeons were generic and not the best, but still)
tl;dr remove fast travel and include alternative travel options.