for someone who started with morrowind, and fell for the open world aspect first and foremost, is it worth going back and playing elder scrolls 1 and 2?
i've recently started getting into the lore a little bit in oblivion, and walking through towns instead of running and all that, you know - getting into the rp a lot more,
is this something the first two games accomodate well?
it is, most of the time, a bit of a stretch for me going back to older games, graphics and atmosphere wise, but if the gameplay is suitably tough and involving i soon get over it - i recently played icewind dale for the first time and really loved it. do the first two games have that same high level of difficulty? or hardcoe roleplay elements?

The best advice is to download them and try (they are free after all).
Arena gives you the epic journey through entire Tamriel (even visiting Dagoth Ur) but there was very little lore back then.
Daggerfall is a huge world and the one where lore started to develop. If you like political intrigues in your stories, you will like this one a lot.

Arena has no real lore in it. Its pretty much a generic fantasy world, with generic RPG gameplay It is fun though if you can deal with 93 era graphics and does have a lot of the locations from the Lore.

Daggerfall is where the lore started to stand out and started to get away from generic RPG gameplay (the skill system started here) The Gods and Deadrea started here. But Morrowind changed a lot of the lore (Tiber Septim wasn't a god, there where no nine divens, but each was there own god back in Daggerfall) Still worth it though imo.

Arena is just too old/primitive to really get into. It feels like a clunky ancestor of the 'real' Elder Scrolls games. Daggerfall, on the other hand? Except for the primitive nineties graphics, it's a fully-realized Elder Scrolls game. I highly recommend it.

But Arena succeeds at having a better exploration system than Daggerfall's.
The infinite and randomized wilderness outside cities where you can find dungeons, smaller settlements, farms, taverns, temples, rivers and even rowing boats you can use is awesome. I always spend a lot of time exploring the wilds in Arena for experience points and loot.

The level-up sound effect often makes me jump off my chair because of how loud it is compared to the rest of the sounds.

daggerfall yes, its awesome. All dungeons in TES pale in comparison to DF dungeons.

arena not so.. a few youtube vids would suffice.

Playing Daggerfall right now, I would recommend it...it even has an arcane school of Thaumaturgy!

I tried to play both have them both installed right now but I can't get past the graphics..

There may be a day I play it though.

I love A and D. More than all other TES, and I am serious (it helps that I do not care about graphs, 2D and such). These elements are good enough so I can get the feel of the adventure.

What I love most about A is as someone said, you get to venture thru ALL provinces - and this to me is something I would love to see somehow back to TES (I know it is unrealistic). Also, you cannot customise class in A, which would seem as a strong limitation, but NO. I loved playing as a Redguard Assassin, which was great seeing all those Critical Strike sequences that none of my other characters had. I also had a lot of fun with a Redguard Ranger and a High Elf Battlemage (which btw is the classe I'd advise you to start in A). I still have the savegames in my pendrive, because every so often I go back to where I was and continue their adventures (same for D).

As for Daggerfall, no other game is so awesome in terms of character generaiton. I always try different builds of my own (like in A above, I played a Stealthy Theif , then a Strong Fighter and the a Magic User type), but I was a bit frustrated by my stealthy type. D has a lot of six content, which I found very fitting in this chapter. Also, the story is very well-written, and you can feel the tensions arising from feud fights.

If you have time and patience to try both, do so.