Combat all this good in skyrim too, only four way for attack like oblivion, they add only some animations and nothing else , it's seem you hit the air the most of the time.
Npc doing the same thing all the day for all the game isn't better of doing nothing , is only a false feeling of living world, if you look beyond you can see it.
Skyrim don't have a magick system, have a limited number of magic , and some of this don't have a real purpouse , like illusion or the frost spell don't slower enemy and the lowering of stamina is useless.
Skyrim has kill moves, actual dynamic combat that feels satisfying and actually makes sense. A stupid diceroll system shouldn't determine if I hit someone or not. But more so, it's fun. Morrowind's combat is frustratingly bad.
NPCs have conversations with other NPCs, they wake up, go to their shop, eat, go to bed. Some go to taverns, browse the market stalls, make comments depending on what you're wearing or do. To say that's the same as NPCs that do nothing but stand there all day is absurd. Everything in a game is to "give the illusion" of something.
Skyrim has magicka, and spells, the same as Morrowind. Spellmaking I'd like to see but it's not a huge thing. Morrowind's spell system had the same stupid diceroll chance of failure, it looked false. Spells are satisfying in Skryim.
However you may disagree. That's fine, it's your opinion. But you cannot say the game is dumbed down or whatever just because you don't agree that it's not Morrowind 2.