There already was a fan made complete overhaul to Oblivion, called Nehrim.
http://www.nehrim.de/indexEV.html
It's not an overhaul, it's a separate game on Oblivion's engine and what does it have to do with the OP anyway?
As for the dog, I wouldn't read too much into this. I take it as a way to stress the dog's loyalty, nothing more. Although it's possible that we'll visit another daedric realm, why not? Morrowind and Oblivion both had expansion packs featuring a Deadric Prince, so it's not far-fetched to expect something similar in Skyrim.