http://elderscrollsonline.com/en/media/screenshots/325

This screenshot supposedly shows Mournhold. It was my understanding the Mournhold was entirely encompassed by the larger city of Almalexia - but here it just opens into countryside. What's happened?

Having trees, and gress, =/= countryside, it makes it a park, which Mournhold had several of.

Yes - but this is outside the Walls of Mournhold which should be straight into Almalexia. Granted there's probably a park leading up to Mournhold, but I can't see anything resembling a city behind Mournhold either.

I thought Mournhold and Almalexia were two different names for the same city.