Well actually Oblivion shows great improvement over Morrowind in reaction on friendly fire,
npc count strikes, with enogh disposition NPC yield, before player always need to have calm spell or use console to stop combat.
But there can be different way to fix friendly fire without using of "magnetism" but it involves scripting
What we know about friendly fire mechanic?
Ownership on creature protect from attack from thats creature from friendly fire, but we can set ownership to all because thats will be mess even more
Accidentally striking an allied NPC is also considered an assault. Unless you have installed the version 1.2 patch, this includes striking your horse. Pay attention to the dialogue for warnings when you strike an ally. Friendly NPCs will usually yell "I'm on your side!" the first time you hit them, "That's TWICE you hit me!" the second, then "Hit me once more, and I'll kill you!" the third. After the fourth hit, an ally is likely to turn hostile towards you. If their disposition is still high enough, yielding should suffice to stop them.
So if there is count for number of assault we can reset it to lower one with script in certain conditions like there is more hostile actors around target NPC, Actor from the same fraction thats target has, target has high disposition toward actor, if such conditions work then script reset friendly fire counter for target, but target will still suffer damage from attack, if add additional scripting we can nullify damage from accident strike, for protect from mass murders without consequences there can be cooldown between resets.
EDIT: There is example of similar mod, add quote marks to UESP info about friendly fire.
NPC Friendly Fire
http://www.tesnexus.com/downloads/file.php?id=35257
But I think magnetism is also good idea if will work for NPC also, just need to wait release and see how it work in game.