if new gamers are not noticing the game then community will enter decline as ppl gradually leave for various reasons (new releases, having 18 kids, dying, swearing off technology and moving to the south pole etc)
as the community declines a variety of things will happen:
1. the Chance of one of the dwindling number of modders coming up with a mod that will entice new ppl to play morrowind reduces
2. the chance of a new modder arriving and doign the above dwindles
3. the incentive for one of the remaining modders to release their mod reduces as the number of prospective dl'ers falls
4. fewer new mods = fewer new modders
5. as fewer mods are released the "community" will gradually die thru lack of stimulation
I agree with most of these points.
For me, it's already starting to happen. There have not been any WIPs on large quest mods that entail companions and romance outside of the Great House Romantic Subplots (what happened to that, anyway?) and Dance of the Three-Legged Guar. Dance is too silly for me. Well done, but not my flavor. GHRS seems more up my alley, but I've not heard anything on it in ages. There has never been an 'honorable' vampire clan/coven done for Morrowind that I've ever stumbled on, outside of -questionably- TU2, and that suffers the same problem as Dance. Campy. Silly. Not my taste.
Most of the mods you see these days are graphical, or only add dungeons and smaller things. I'm wanting to keep expanding on story and large companion quests, but there seem to be fewer and fewer of those as time is passing, and for me, that's about all that drew me to modded Morrowind. New races, hairs, faces, clothes are always lovely, but I've always been a heavily story-driven gamer, and unless I take up the pen and give myself migraines working out teleportation scripts, I don't think I'm ever going to see a story/companion mod on the order I want ever again, and that makes me quite sad.