My good friend cannot read very well, the text for dialogue , messages, scrolls , and windows are just too
small text/font. Are there MODS which enlarge all text which is required to read ? My buddy probably will
not play what seems to be a great game...help !

FPS Optimizer has an option to magnify the User Interface. It's on the Misc2 tab, look for the slider at the bottom. It's a little touchy, sometimes I have to have Morrowind load from a save to get it working, so it's not perfect, but it kind of does the job.

You can also choose a more readable font, I use the following in my Morrowind.ini:
[Fonts]
Font 0=century_gothic_font_regular
Font 1=century_gothic_font_regular
Font 2=daedric_font

I believe there is also resolution settings you could alter to get bigger or smaller text depending on your screen size. It's under "options" on the morrowind launcher. you could try playing with them.