You might find my mod list interesting if you want to stick to lore-friendly content. And also a bugfree game.
Morrowind Patch Project. Fixes a million bugs.
Morrowind Code Patch. This is a must.
Better heads
Better bodies
Tamriel Rebuilt. This adds huge landmasses which are based on the lore and part of Morrowind.
Official plugins
Join all houses. Not so lore friendly as you shouldn`t be able to join all three great houses but if you want to play the game to the fullest then this is what makes it possible.
CliffracerFIX. Makes cliffracers neutral towards you... it also makes them less annoying, somehow.
encumberance_modifier. This makes your strength give you three times more weight limit... makes things more comfortable for the player, you don`t have to go back to town to sell your loot every five minutes.
Darknut`s textures. This is not the actual name of it. He has several mods that alter armor/weapon/monster textures in the game to appear more sharp and have much more detail. Just google Darknut and you`ll find his stuff.
MGE. Google it. It can remove fog and enable distant land. Instead of your sight being all fogged up, you`ll now have a clear beautiful view.
I also recommend searching some lorefriendly splash screens like this one http://planetelderscrolls.gamespy.com/View.php?view=Mods.Detail&id=5463 to spice up your loading screens.
But if you`re feeling naughty and
Spoiler are into some freaky vampire stuff then you`ll want the underground mod. It has a pretty good questline. Not so lorefriendly, though.