Actually, Oblivion has a lot of "INFOGENERAL" or "Rumours" about the difference between Colovians and Nibeneans. Apart from this, it is never shown in any way. Not in architecture, not in names, behaviour, culture, or anything.
Each of the two cultures has several unique architectures. As for culture, Morrowind didn't have that much either, just a few generic greetings, town descriptions, and rumors. Just like in Oblivion.
So I take it I should be afraid that Leyawiin will soon be deserted now that the Blackwood company is destroyed, there is no more money to be made.
That however is completely cartoonish. Eight cities with eight industries, eight divines, eight guild halls with architecture from the eight surrounding provinces. It doesn't form a coherent world but makes them eight isolated bubbles.
It would have made sense if those were the eight districts of the Imperial city because people with similair trades like to bunch up in cities, but each city has it's needs and going all the way to Kvatch because you want some entertainment is a bit silly.
The Imperial City's trade industry is anything but a "bubble"; it's a very important trading and commerce center. Being in the center of the Empire, there's a lot of trade going through it. And it's not like Tel Mora or Dagon Fel had much of an industry aside from some local fishing. Sure, Gnaar Mok and Hla Oad had a smuggling industry, but then again, so did Bravil and Cheydinhal.
And acting like Morrowind did culture so much better is a bit silly. They just stood around doing nothing, and the only real culture-defining behavior, namely greetings, rumors, and town descriptions, were all carried over to Oblivion.
Now I see that you haven't commented on my other questions, so can I take that as a begrudging acceptance that Oblivions depictions of Cyrodiil is lacking here?
No, I simply lost track of your other questions.
Those differences go all the way back to the start of the Empire because the Nibense were much more isolated by the jungle and thus more entangled with the old Elven goverment structures. The Colovians on the other hand were in close contact with the Nords. These differences survived for almost 4000 years, or rather those 4000 years in relative isolation by the jungle created two different peoples.
Now this isn't something that goes away in only 400 years. If you want a real world example. Try Jerusalem. The people there were living in the same city and they didn't magically become Jerusalemites over the course of several years hundred years. Quite the opposite in fact.
Or an even better example would be Turkey. Attaturk forced a whole nation to westernize themselves and it worked for a fraction in the cities but the majority in country side remains staunchly old fashioned and are slowly rolling back these changes when it comes to religion and culture.
It isn't a big secret that Ocato is the Imperial Battlemage. So any one ambitious and intelligent enough to want to be the Emperor will account for that and take appropriate precautions. While we don't know but the devs have the freedom to make it so.
On the other side of the spectrum, things have radically changed in 400 years, especially after the jungles went poof. For example, a group of colonies broke away from the British Empire, spread to the west coast of the New World, split into two halves, fought, and were re-united. And don't get me started about the last 100 years. Granted, it still contains many very diverse cultures, but they evolved over a few centuries.
And it's still a game; it won't be able to perfectly depict cultire. Morrowind didn't depict culture that great either, except for the Ashlanders, who have different dialogue for just about everything. All the rest of the people had were a few different generic greetings and rumors. There was politics, but given that five great houses have been fighting for dominance for millennia, Cyrodiil doesn't have that sort of thing.
Which I reckon is the problem with your line of arguing. You are trying to defend Oblivion against suggestions what Oblivion should have been by examples from what Oblivion is. Which is somewhat like arguing against the demolition of a house to build a new one because there isn't enough space to build one.
At least I don't claim to know or determine what it should have been. Bethesda made this game, not you or me. It's their property.
No matter what the Darkbrotherhood quests in Oblivion showed, there still are competent assassins in Tamriel.
Even the Mythic Dawn learned that they had limits; otherwise they wouldn't have used two Siege Crawlers and a horde of Daedra for the effort of killing one man.
Edit: Changed a part to keep it somewhat civil.