If someone had never played an Elder Scrolls game you wouldn't want to start them on Morrowind today they'd think you were an idiot for making them play such rubbish.
You're right. You'd want to start them on Daggerfall. Excuse me while I go puke on all the candy coated bullshit that Skyrim has been forcing down my throat lately.
Yes, the game system interaction and functionality has improved. The quests are an improvement on Oblivion, somewhat less an improvement on Morrowind though it's been a while since I've played that one. Everything else you've stated is part of what I enjoyed about Morrowind. Well, except the pitch black dungeons but even then those were more realistic and dungeon-y than ancient burial chambers lit by torches-of-mystical-neverending-light conveniently at every 3rd yard.
Now. I'm done comparing anything to Morrowind. Go away. This thread is supposed to be about Skyrim. Anyone else gotten Dawnbreaker yet? That's one flashy piece of gear.