#1: More diversity with the weapons. In Oblivion, weapons only have 3 stats: Range, Attack and Attack Speed. Weapons should have more stats that would make them more usefull or less useful against particular enemies. For example, swords could have a stats that make them very powerful against unarmored enemies as swords in real life were made to cut through flesh and bone easily, but against armor, the light weight of swords dont pack enough of a punch to really arm an armored foe. For such enemies, it could be weapons like maces. In short, have more diversity between different weapons.
#2:Diversity between different elements of the Destruction magic school. Fire, Frost and Lightning are exactly the safe darn thing in Oblivion. The only difference is that some spells allow you to resist 1 of them more. They should each have their own unic effect and ways to use it. For exemple, fire spells would cause the enemy to ignite and cause damage over time for a certain period of time, making it a great combat spell. Lightning would make the enemy flinch and crouch from the electric shock, which could make it a great spell for archer so they can shoot an arrow to the immobilised target in the short time. Frost would be the most silent of all 3 element and slow down an enemy's moving speed making it ideal for an assassin trying to kill a fleeing target before it warn's the guards.
#3: Separate swords and daggers. Those 2 weapons should have their own categories and their own uses. Swords are more battle-oriented tools but knifes should be more oriented for assassination and while sword would give many powerful combat move, dagger would give bonus when doing a sneak attack, such as penetrating the target's armor, and assassination moves such as instantly killing an unarmored humanoid by slicing their throat, or atacking an enemy from the back by jumping on him (a bit like assassin's creed if you want).
#4: Small suggestion, different sitting positions. The Oblivion's way of sitting is well...dull. How about having some different sitting positions and being able to select the position you'll be sitting when sitting on a chair, throne, bench, whatever.
#5: Horse combat please?
#6: Bigger cities and more people. I've always been bothered by how few people actually lived in the cities of Oblivion. It was pretty weird when you went all over the imperial city and could only find roughly 30-35 people in the capital of the whole continent. Also, how about having the NPCs to actually work instead of just hanging around in the tavern or traveling aimlessly? Again, in the imperial city, the Argonian in charge of making the armor for The Best Defense, never make ANY armor! He just travels around the city, or stand in the best defense doing absolutly nothing. The only people actually working are merchants and some farmers.
#7: Bigger large-scale battles. The biggest battle I saw in Oblivion was the one in Bruma, where we try and get the stone from a large oblivion gate, yet it barely had like 20 people, allies and enemies inclued. The biggest Battle in the entire game, is not even worthy of being called a small skirmish. And other than that one and the final battle of the Knights of the Nine, I can't think of any battle involing more than 10 people. So few people kinda ruin the Epicness of the battles.
#8: Location Damage. Just why is shooting an arrow on a guy wearing a breasplate but no helm, doing the same damage no matter if it it his hard briastplate or his unarmored head...just why?
#9: A better difficulty system. I always HATED how Oblivion's difficulty was made. I understand you don't want to put strong monsters to new players, but you shouldn't modify the strenght of EVERYTHING when the player level up. At level 1, everything is so weak, even the guards who have better armor than you normaly should, yet you could go on a rampage in a city and kill every guards without too much problem. But once you reach Higher level, everything gets way too strong at the point where when I was lvl 26, I got my ass kicked by 2 goblins. 2!!! And I was wearing enchanted daedric armor and wielding Umbra, yet those guys took like 30 hits to kill! The difficulty needs to be fixed, as in guards can kick your ass in the beginning like in Morrowind. I really dont get why it should be harder to kill monsters because youre stronger. It should be the other way around, as in goblins are most likely dying from 1 hit at high level, but in later quest, you encounter tougher monsters. In short, make the solution for a too hard dungeon leveling up, not restarting the game so you can go there lower level to have the monsters weaker!
#10: Better Music. Seriously the music in Oblivion bore me so much, I deleted the entire music file and replaced it with my own. You guys are professionals! You made the awesome Morrowind's Theme song, you have no excuses not to make the music in future Elder Scrolls eargasmic!
#11: MORE CHOICES! This is very important because the Elder Scrolls serie have usually been more of a ''choose your adventure'' type of game, but Oblivion was too straightfoward. You could only play as the basic faction and were forced to stick with them to the very end! There was no choice to join other rival factions such as the necromancer guild, the blackwood company and such. Or even if you dont join a rival faction, you could at least be given some decisions to make during a faction's Quest. For example, during the thief's Guild Faction quests, Hironymus Lex could come and see you and give you an offer. He would ask you to help him capture the Gray Fox and in exchange, he would reward you greatly and forget about every crime you have commited while in the thief's guild. You could accept or refuse, both would have their own rewards and consequences.
#12: The most important suggestion in the list in my opinion. A better, easier to use construction set! This would allow more people to easily create mods and share them online to make the experience of elder scrolls richer and endless, as there are constantly new stuff. Make the best construction set you guys can, it's extremely important!