Why not simply replicate something akin to what has actually happened in TES history; a large scale battle to defend a particular city, say for instance like the Empire had to do in the Imperial City?
It doesn't need to be a "one man army" thing in the least. Help NPCs, lots of NPCs, defend the castle, if too many NPCs die it switches to a once again "open world" where you can stay and fight or flee and allow the castle to be taken.
So much potential to be really fun

, but the idea has promise. If they created a DLC centered around a single battle, you could fight on both sides, choose your role, etc. Would be interesting to say the least

