Okay. So how do I install it properly then?
*feels like idiot*
It sounds like you have placed the esp file in the right place and activated it correctly hence the crashing and warning messages, so my guess is that the meshes and probably the texture file the mod needs to work are not in the right place.
Solutions for installing mods vary depending on which version of windows you are using and whether it is the steam version of Morrowind or CD.
However, Look in the same location as you placed the Dwemer Sentinel esp and you will see several folders, one will be called 'meshes' and there will be another called 'textures'
Look inside the 'meshes' folder and and there should be another folder called 'Daves lab' inside that there should be 10 files , 7 with the .nif suffix and 3 with .kf suffix, if yes then they are in the right place , if not you will need to extract the Daves Lab + 10 files from your mod download and place them in your morrowind/data files/meshes folder. Ensure that there is not a second folder called meshes inside your main meshes folder as the 'Daves lab 'folder could be inside that in which case take the daves lab folder out of the second meshes folder and drop it in the first, then delete the second meshes folder with extreme prejudice.
Then look in the 'textures folder' and there should be a file called Dwemer_skin.TGA if yes it is in the right place, if not you will need to extract that file from your mod download and place it in your morrowind/data file/textures folder. Check to see that there is not a second folder called textures inside your main textures folder as the missing file could be in that, if so take it out of the second textures folder and drop it in the first , when empty delete the second textures folder .
Once the respective resource files from the mod are placed on their respective folders the game refers to inside your morrowind/data files folder, the mod should work.