The first time I played Morrowind I didn't use any mod. When I installed Tribunal and Bloodmoon, then I did. The first one was a known house, A Good Place to Stay. Then I thoght, why not to do my own modded house? In that moment my passion for mods began.
Morrowind came with a CS, the CS is for modding, right? And the CS was made by Bethesda, the original creators of the game, and giving us the CS had a purpose: play with all the content available in the game, experiment with it and enjoy :3 .
A modding community arised with the years, and modding has evolved into what is today. What we can do in mods is limited by technology and Morrowind core.
With time, many limitations are gone. Distant land for example, or bumpmapped textures. You can be purist loving 2002 graphics, but see what Bethesda does today in 2011. They use technology to achieve better results, don't they? Modders do the same with the game they love: use technology to improve Morrowind graphics and write better and more complex scripts.
Today I use more than 200 active mods. I don't consider all of them a must have, but I'm very used to all of them.
Graphic replacers, graphic enhancers, lots of clothes, alchemy mods, houses, landmasses, towns, dialogues, quests...
95% of all this is lore friendly, the remaining 5% it's for fun or experimenting
See the mentioned Less Generic NPC collection, that gives a lot of variety in dialog. See Book rotate or weapon rotate...
In the end, it's your game. Everyone thinks his or her game is the best because it's their game : )
If you ask about mods in the Morrowind Mods section, well, here is plenty of people using and loving mods
Purist - What's this? A Christmas tree? Christmas don't even exist in Vvardenfell!!
Nonpurist- Well, er... it's pretty nice in Solstheim, here with that funny man in colovian hat singing, don't you think so?
Purist - Sinner! Non lorefriendly mods are the demon!!
Nonpurist- Hey, the demon don't even exist in Vvardenfell...
Purist- Remove that Chrismas mod if you still are my friend (sobbing).
Nonpurist- Here, have this Christmas pudding, I've made it for you with all my love. Please install it : )
Purist- Oh, you did it for me? (emotioned) *sob* I suppose I can forget my purism for a moment : )
Sometimes a mod it's a friendship story!