plus, if you look at Oblivion at face value and nothing else, it's hell, so there has to be that other.
In TES IV, you are only seeing what I assume is Dagon's plane of Oblivion, The Deadlands. Since he represents destruction, it makes sense that his realm has things that are destructive: actively hostile foliage, fire/lava, a harsh landscape, that sort of thing.
However, that is only one of the http://www.uesp.net/wiki/Tamriel:Oblivion. http://www.uesp.net/wiki/Tamriel:The_Doors_of_Oblivion is a good read, in addition to the Planes of Oblivion link I provided.
If by 'hell' you mean a negative afterlife, then I don't think Oblivion is hell. I haven't so far encountered anything to suggest that souls go there at all after the body dies. It seems more that Oblivion is comprised of different subrealms/planes that (mostly) belong to Daedric Princes. Lesser Daedra also inhabit the planes and align themselves to different Princes. The book http://www.uesp.net/wiki/Tamriel:Spirit_of_the_Daedra provides a glimpse into the values and motivations behind the lesser daedra.