I have Hearthfire and I was talking to a guard and he said something along the lines of being so close to Morrowind and having a advantage when they attack them? Future Dlc maybe?

I've heard this too. Maybe he's being a tease.

Could also just be flavor dialogue.

But I never heard this comment until I downloaded Hearthfire. I lived in Riften

I've never heard that comment, and i'll never have Hearthfire. But hopefully if there is a Morrowind DLC Ps3 players will be able to kill some blue elves after killing some yellow elves.