Hmnm, interesting looking mod. I just returned to Oblivion after about a 1.5-2 year absence, and I decided to play a straight mage with the Atronach birthsign. I thought it would be a fun challenge, but instead it's a bit of a nightmare, mostly due to the insanely high magicka costs of everything (especially considering that the hit points of enemies are plainly balanced for high-strength-and-endurance fighter types). Looking over your description of the mod, there are a couple of things in here I'm not a fan of, but mostly these sound like the way the game should have been.
A couple of things:
A.) Does OBSE slow down the game? My computer isn't exactly cutting-edge, and I have some problems in outdoor settings. This is the first OBSE-dependent mod I've ever really wanted, so I really have no experience with it.
B.) A though/suggestion: I would love to see a magicka cost reduction tied to Spell Effectiveness of 100%, so unarmored straight mages see more of a benefit from not wearing armor. Currently, all those lost enchantment slots plus the protection is an awful lot to give up for not much gain.
C.) Looking over your optional birthsign changes, I just have to ask, don't you think the Atronach birthsign is gimped enough in vanilla?
I recommend using the mod along with the http://theelderscrolls.info/?go=dlfile&fileid=215, which sounds right up your alley. Supreme Magicka is one of the most balanced of the magic overhauls. Consider the overall changes to the magic system when looking at a specific change. Race Balancing Project increases the benefits of lacking armor and tones down the birth signs, however. If you use BOSS to install your load order, RBP will load last, so you will have its birth sign changes. (Read the readme thoroughly to see all of the changes. It is quite impressive.) You can also tweak the Supreme Magicka INI to match all of RBP's settings if you look for the default RBP value in comments. I suggest first playing with SM's settings because (as I said earlier) it is already well balanced.
Edit: Since you are coming back after a long absence. I suggest reading through the guide linked in my sig. It will walk you through the process of installing Oblivion, the latest patches (official and unofficial) the current utilities and the installation of various mods. There is a lot of other information on the site that you may want to catch up on as well, but I suggest going through the guide first.
From SM's readme (first post): It attends to the armor penalty as well. RBP is much more severe, which is easy to see if you look at the differences in the defaults in the INI file.
* General Changes:
Changes some game settings: armour now penalizes your magical abilities more if you wear more equipment but penalizes less if you only wear a few small objects. Your magicka regeneration rate is slower at the beginning but increases a lot faster at higher willpowers. Magic projectiles are faster and travel further but are still not at the speed of light. Ranged and area spells cost slightly less than before. NPCs also have higher magicka to compensate for their stupidity. Most of these settings are configurable in the customization file.