Diversity for diversity's sake is a mistake and should always, always be avoided. Things need a reason beyond "it's cool" or "it chnages things up". Changing things up, and cool things are great but unless they make sense, it's a mistake. The Imperial province is a place you'd expect to see a general cross-section of the peoples that make up the Empire. Skyrim is not the Imperial Province

Your logic is similar to wondering why there are no alligators in the waters off of Winterhold

Just murdered a wood elf, got some sweet gold for it. Don't know why they made me do it though, he seemed like a nice guy.

For the sake of realism, I think it's good some races can hardly be seen... Wood elves and especially the Khajiit look out of place. Seeing a khajiit in the snow always makes me sad, especially when he wishes that 'may your roads lead you to warm sands'. He needs the desert By the way, wood elves are the small ones, right? Like Rindir from the Imperial City in Oblivion.

I agree. Personally, I like lack of racial diversity in Skyrim. It feels more natural to me; my Bosmer ranger travelled all the way up to this cold, harsh country on the other side of the continent and she certainly didn't expect to see any familiar faces - it's not home, it's a foreign, unfamilliar place.
Cyrodiil was the heart of the Empire, the most cosmopolitan of the provinces. People from all over Tamriel lived there, just like people do in real-world capital cities. But Skyrim, what reason does a Khajiit have to live in Skyrim? Or an Argonian? No, I think cultural diversity is quite well balanced in this game. Skyrim is the homeland of the Nords, it's only logical that most of its citizens are Nords, especially given the cold natural environment.

However, I'd like to see just a couple more members of each race in the major cities. Just enough for every race to have potential spouses of both genders.

That's why I gave my Khajiit white fur, like those mutated Bengal tigers have The only problem is that with his robes and hood on he looks almost exactly like J'zargo... I'm so going to kill this arrogant cat.

Yes, and since I'm playing as one he became my first companion on my first few quests. He also become my first companion to die, LOL!!! I really can't keep them alive long!!!! Actually it was kind of cool because I was just walking through town when he stopped me and started up a conversation. He said something like "haven't seen many of us around" and then went on to offer his services to help me. I was sad when he died, .

very true, the last time they opened thier arms to an elf race it back fired on them with the dunmer.

The elf who chops wood next to the blacksmith shop in Riften is a Bosmer. He tells you how much the woods around Riften remind him of home.....