Other: physics. No, I don't mean rag dolls (tho that they added them was great). I mean when they develop anything, they should consider the real world physics of it. Not just physics either but everything should be done with half a mind on common sense.

Why do I take damage when I'm wearing armor? What is happening here? Swords go THROUGH plate? Then how is it I'm not dead after 2 or 3 whacks? Armor should effect magic: Things like Faraday's cage should apply, all clothing should affect hot/cold damage. Fire/ice damage should be hot/cold damage. Fire is an oxidation-reduction reaction, not a modern mystery, you need flammable matter before it can exist (fireballs are unrealistic, unless you create or fabricate fuel in mid air). Heat is just energy. If you can do telekinesis, you can add heat to something -- basically, just push particles randomly instead of pushing them all in one direction. This is why schools of magic is a little odd to me (fire = destruction, telekinesis = mysticism, shield = alteration? aren't these all the same thing? Just moving matter in different directions?)

More armor: Better quality armors (and weapons btw) should be lighter, not heavier. If you want to argue about it be my guest, but this is already going to be a long post.

Shock: we have empirical data on the speed of lightning, USE IT. Lightning is different than Hot/cold. How? Think about it. Go read some textbooks. How should it act? Does this line of thinking unbalance the game? Too fast? Or does it add another option to the mage's arsenal? As it stands fire=ice=shock. This should not be. From a game play perspective and a realism perspective.

When I absorb magic what is happening? Am I not redirecting the other mage's energy? Or am I absorbing the heat? This is an important distinction. Am I interfering with his energy or using the resultant world reaction to his energy? If former than dispel = reflect = absorb = magic regen (and if MP = fatigue like I advocate...). If latter than Absorb spell should be different for absorbing fire than it is from, say, absorbing drain [attribute]. ( I mean, there should be "absorb fire" spells and "absorb drain" spells.)

Spells? What is a spell? Disambiguate it. What is magic? does magic = spells? Spells, to me, mean "cast this, that happens" cut and paste DnD, Charmed (yes that tv show), a bit like a bullet, it has 1 use, lasts this long, and then its gone, not flexible at all. Magic, to me, seems like more than just spells. More like "the ability to affect unexplainable change" "an invisible hand from the mind" an overarching group of abilities that includes spells. Spells = Invisibility for x time. Magic = I can pop in and out sight at will. follow? Am I crazy here? Spells are old school, archaic, and obsolete (they were in Daggerfall's time), let's move the spell maker right into your characters magic menu. (think a little like MW's enchanting.)

When I quaff a potion, what's happening? *magic* ? No. Everything shouldn't just be written off as magical even tho this is a magic fantasy world. When you Quaff a potion your body reacts to it and it changes. Changes should be in the realm of the reactions that are possible in your body. Feather = no. strength+ = ya maybe. Strengthx100? No. Since, as it's described, feather is basically anti-gravity and that's not a bodily function (belongs wherever they put telekinesis). This has gameplay advantages not just "realistic" ones: changing alchemy from a skill that replaces 1/2 of the magic system to a skill that complements an already well developed magic system.

What is MP? Why do we need it? Why doesn't fatigue work? Is not fatigue a measure of your bodies output over time? If magic costs energy then what does your body extract from food all day long? Am I the only one that sees the overlap here? Why can my Spellsword cast spells until he is exhausted, close, and then swing a sword until he's exhausted *AGAIN*?

Magic is cool, but the law of conservation of mass should be observed. You (you, not the aedra) can not create, you can exchange matter for energy and vice versa, sure but it's expensive (according to wolfram alpha, the energy of 1kg (2.2lb) of mass is comparable to the 60% the energy in the explosion of krakatoa in 1883 (wiki it) or 1/2 the energy the sun delivers to the earth each second (btw, think of THAT. The sun essentially adds 2kg of energy to earth every second?). How powerful is your mage again? You should not be able to use more energy than you have in your body or can handle. (using external mass / ambient energy would be alright)
Conjuration? yes, summoning is ok. you don't create that Deadric axe, you just teleport it. Teleportation? how does this work? Do you open a wormhole? This is the proper realm of "its magic, so anything goes" since we don't have enough data that we can say "this doesn't make sense" as science progresses, this should change.
Enchanting? MW's Enchanted items regenerated. HOW? Where does this energy come from? The soul? The soul regenerates magic, but MY soul doesn't? What happens to the soul gem? It vaporizes? Law of conservation of mass. Where does it go? reusable soul gems aren't necessary, but this is food for thought. The game includes useless clutter like bones. Bones are useless in every way, but they are still there. Why not have used soul gems. I'm not recommending the devs put in MY system here or there. I AM recommending they think about these things.
Archery: E=1/2MV^2. The damage of an arrow should be determined by its mass (shape, weight, size, are valid consideration) and its velocity (how fast). More detail: damage shouldn't be based on this per se, it should be based on how that arrow affects its environment. For example, what does this arrow hit? flesh? bone? organs? steel? is this an ice atronarch we are fighting? Does the arrow Pierce thru tissue? How does this material affect the arrow? Does the arrow bend, break, shatter, become blunter? No I don't expect them to calculate this, but I expect them to consider it when they make their calculation's formulas. If hit boxes are in, they shouldn't be on the skin, or they should at least consider directions and angles. head shots are not fatal by default, there are helmets, skin, fat, bone, and brain to consider as well as glancing blows/ flesh wounds. Bones should be considered armor as much as armor is considered armor in OB (They are the bodies natural defense). Losing your jaw is not immediately life threatening (bleeding from it however...)
Bows: Bows shouldn't have damage stats, they should have output stats. How your bow affects your arrow should be all the bow does. Namely, how much energy does the bow give the arrow. After that E=1/2MV^2. In other words how fast the arrow goes depends on how much it weighs. We have empirical data on how fast arrows go (with different styles of bow). USE IT.
Athletic: People don't get more well rested by running. Even walking is a drain. Also, people don't Sprint everywhere, usually people don't jog anywhere. Do I think walking should drain fatigue? No. Do I think jogging should drain fatigue? A little bit. Do I think running=jogging=sprinting? Definitely not. (hurray for sprinting in Skyrim)
Lockpicking: time doesn't stop for thieves.

These are ideas that a lot of people will say "that sounds like no fun" and maybe that's true. I agree, fun here is the ultimate goal. But no feature should be made without asking "what is going on here? How does this make sense?" No feature should be cut because its not real enough, but every feature should be made with common sense in the back of the mind.

Yes, but you seem to forget that what you want is impossible simply because the physics you describe either do not exist in Nirn, or work very different from our own.

Remember that the sun of Tamriel is not a huge fusion reaction, it is a hole in the aetherus that Magnus tore when he withdrew from Lorkhan's project.
It is from there that magic pours into the world.

Remember that the planets are not balls of rock and gass millions of miles away, but the plane of a god. (As well as a ball of rock. Its confusing.)

On Tamriel certain mundane plants have arcane properties. A scholar might tease these properties out using such tools as a calcinator etc, and invocations and phases of the moon. (for gameplay reasons the latter only in books)
So a potion of feather is very much as possibility, as feather is a common way for certain arcane energies to affect the world.