Absolutely, yes!
I played vanilla, or with just a couple of very small mods for a few years and a month ago I went back and installed a lot of great mods. After playing hardcoe mode in New Vegas, I decided to try some of the Oblivion survival mods - lots of fun.
Here is a list of my favorite mods - they all work well together if installed properly. Oblivion now looks beautiful and I'm getting decent frame rates on my laptop in 1920x1080, all detail settings maxed (and i'm using a Steam installation)
(1) FCOM/Oscuro's/Martigens/Francesco's/Warcry
(2) Real Hunger COBL
(3) Real Thirst
(4) Real Sleep Extended
(5) Bananasplit's Better Cities
(6) Qarl's Texture Pack 3 (4k HD Textures)
(7) Oblivion Graphics Extender v2 (OBGEv2)
(8) ENBSeries Shaders
(9) Advanced Windows Lighting System
(10) Tamriel NPCs Revamped (finally the NPC faces don't look like crap)
(11) Supreme Magicka
(12) Less Annoying Magic Experience (yes they both work together)
(13) Ren's Beauty Pack
(14) HGEC Body Replacer (AA cup is best one)
(15) Elaborate Eyes
(16) Oblivion Stereo Overhaul
(17) Immersive Oblivion (sound mod)
(18) Enhanced Economy
(19) Mystic Elves (playable race)
(20) COBL Races
I would definitely not recommend it for a first playthrough
Depending on your playing style, your first playthrough can last years. I have never completed the main quest, in fact.
I'd recommend to play at least a few weeks vanilla before installing major mods. The survival stuff is a lot of fun, though, and the beauty mods/Tamriel NPCs Revamped, make the NPCs look a lot more realistic and get rid of that deformed Jay Leno chin.