It dawned on me of a way that might be possible, except for where the quest line requires killing an NPC. My strategy is a work in progress, I don't know if it will ultimately work, and I think it requires specifically installing one or two components of the Morrowind Code Patch (MCP).
1. in MCP, select the option to steal from KO'd NPCs and the option to knock them unconscious
2. learn a spell to damage attributes and then tailor it to damage strength
3. casting it a sufficient number of times eventually immobilizes an NPC, so that if nothing else you can casually (and contemptuously) turn your back and walk away
This would at least let you disable your opponent's attack without killing them. I've done this successfully with several run of the mill thugs so far. I'm thinking something similar would have to be done to damage an NPC's magicka if it is a spell caster but haven't tried out this part of the strategy yet.
IMy char is not forgiving the attack, just declining to kill the attacker. He has no qualms about humiliating the attacker by taking all his goods, including clothing. That seems only fair. That's why I mention the ability to steal from a KO'd opponent. This is something I haven't had a chance to try yet, so don't know if it would work or if the game would "interfere" by labeling me a thief.
After trying the damage fatigue, it seems to me that I may also have to tailor a spell to damage endurance - the intent being to keep the opponent unconscious long enough to steal from them. Again, I don't know if the idea will work - taking everything so that they're stripped naked, like that Nord west of Caldera. It seems like a fitting punishment for someone who just tried to kill you
Thoughts?
John