I don't see why the disc version of the game wouldn't work on W8. I myself have the Steam version installed and it works perfectly.
Yes, it works just fine.
It's best to move the install location of the game out of the default location. (Program Files)
Install the game normally, then take your Bethesda folder and move it where you like. Most people make a C: Games folder for things like this.
You can make folders anywhere you want. Open your C: folder in your Computer directory, and right-click on a blank section of the field. Look for a New option, and choose Folder to create a new blank folder.
Then name it Games
Install Morrowind, and then can you copy/paste (or cut/paste) your entire Bethesda folder (it will be in Program Files 86) to your Games folder.
Doing this ensures that you can edit any files if you need to. And it's necessary for using mods.
Well I am trying to install it now but I got some kind of error that said something about a redundancy check error or something. I have no idea if the game is installing still because there is no progress bar.