i think it should be morrowind style except mixed with oblivions style in the fact that some npcs arnt always essential also a warning that they are essential when you strike them initially also they shouldnt fight back or if they do be staggeringly powerful and provide no experience
I guess, but that places a lot of restriction on what story NPCs can do with their routine, which might make those NPCs - the most important in the game to be interesting - less realised than they might have been.
Besides, with dragons attacking towns
nowhere is going to be safe :shrug: