Why not Vvardenfell? It's been ~160 years since the volcano erupted and the Ministry fell into the island. Plants would have grown back quite a bit since then, and with plants comes food and work and with those things comes people. There should be a living, breathing society on Vvardenfell by now.
...http://www.imperial-library.info/content/loveletter-fifth-era-true-purpose-tamriel. Tamriel is a magical world built on Plotonium, not real life geology.
Anyways, I'd admire and probably check out a well-done effort, but no, I wouldn't really play it. Quite frankly I don't understand the fascination with Morrowind, I've got the game, I'll play it whenever I want to. A mod set just after the departure of the Nerevarine focusing on the death of the Tribunal, or one set in the past, perhaps at the end of the 1st era in the midst of the Reman conquest, would appeal to me more.
If you are set on modding it in, however, check out Phitt's Sheogorad mod for OB, and ask him about porting over the meshes. They are excellent, and they should save you a lot of work. I've got to say, though, modding is
a lot of work. I'd start off with something smaller (like the aforementioned Sheogorad) before trying to create a huge mod. It not just making thousands of meshes and textures, its making thousands of interiors and exteriors, writing thousands of lines of dialog, hundreds of quests. Furthermore, since you're aiming to essentially re-create Morrowind in the Skyrim engine, there is not going to be a whole lot of creative freedom, and that gets quite boring quite quick.