Have interesting shorline environments. And by that I mean hidden caves here and there, both on the shores and underwater. Have ancient, sunken ruins forgotten in the water depths. Have ruins that are almost upside down as well because they have been collapsed, etc.
Try to make the mountains look good. Morrowind's mountains were awful, because they were basically just bald-spots all over the place. Use moderately steep mountain LOD, like MERP mod uses.
Have better environment transitions than in vanilla Morrowind. Make the environment transitions more natural and gradual, and not just abruptly change from swamps to volcanic lands if you step 50 meter across a small hill.
You can retexture the aspen trees to green-looking and use them partly in the ascadian isles area.
Also, I know Morrowind has changed in lore since the TES 3, but try to keep the atmosphere and feeling like it was in TES 3, even though the Argonians now roam the land...
That was one of the things that made Morrowind great. If you make your own music then that will be really really important, to hit that atmospheric sound Morrowind's soundtrack had. Or you could ask Bethesda for permission to include Morrowind's soundtrack in the mod...
Have some reference to Caius Cosades, please?

He's too cool to be forgotten.