Timeline wise even with all the Prejudice half and halfs should be more common. (and like was pointed out has already happened in the game for NPCs) i think the character creation would be perfect too. imagine picking a half orc half nord and having slightly increased strength and slightly decreased merchant skills.
actually my personal character build would prob be half orc half wood elf battlemage.
If you could do a mix breed what would it be?
Why not make it possible to be 1/8 kahjiit, 1/8 argonian, 1/8 orc, 1/8 highelf, 1/8 woodelf, 1/8 breton, 1/8 nord, 1/8 redguard and make most npc like that, all cities will be alike and there will be no uniqueness. And call it "Elders Scrolls V: Political correct Skyrim", and ur mainquest will be to tell all the non-mixed nords "how racist they are", 1 million times.