What helped pull me out, and keep me out, of the story, of feeling some sort of empathy or apathy for the world around me was that the world around me, along with its people, did not come off as harsh enough.
When I walked into a Stormcloak camp as a High Elf Mage, or even a High Elf wearing Glass Armor, I literally expected to be instantly thought of as an enemy due to how much emphasis was put onto disliking/hating the Elves and Thalmor, and I looked like one casually strolling into their camp.
Even if you take the Nords and Elves out of the equation, I was expecting to walk into the "wild North." Towns being raided, people being beaten, people going hungry, etc.
I felt no connection to the world around me. I felt no actual reason was given to join one side or the other.
I think the only world Bethesda has created that felt hostile both environmentally, and socially was Fallout 3. But even then it came off as somewhat silly and childish.
So... you can't feel involved because the Dunmer aren't as bad off as you think they should be?
It's presented as racism, as if they're being treated poorly, yet you find that they live better than you do sometimes. At least they have a home, outside of that one instance when walking into Windhelm the topic is dropped from an already low point, to an even lower point in which it is barely noticeable and becomes a way to break the ice.
It honestly feels half-baked to me in most cases. There are a lot of partially realized ideas in the game, that hurts itself by not going all the way. I mean, I can run around Windhelm, even buy a home there as an Argonian, and nobody cares. I can enter any city as a Khajiit and nobody cares, despite npcs of the same race being barred from entry. It's just overall, lack of internal consistency.
In a way I wish my character had a 20% chance of dying at the chopping block, Alduin didn't come, or maybe I was picked first. Then I'd have a 40% chance to never become the Dovahkiin while one of my escaped prison mates become it. On top of all that if I was a Khajit I could never go into cities, and if I was an Argonian I could die based upon poor blood circulation.
That would be a terrible game in which Khajits were worthless, Argonians were just ice cubes, and I had a chance to become a mere merchant.
It is not about understanding their motives. It is about making their motives yours. Stormcloaks are rebells. They want the rebellion so much that they do not care about their problems at home or about racism or much anything else. Imperials want a higher goal, they always "stay sharp", and put you on the execution block even when your name is not on the list. There is a difference between understanding someone's motives and leaving your own behind to take on the motives of others.
To be fair I'd have to understand their motives in order to make them mine... but lets forget that. I honestly don't find their motives satisfying to me, they don't hold much weight other than one being the the Snow Miser and the other being the Heat Miser... while I'm stuck playing Mother Earth and I don't even get a awesome catchy song.
But the dragons, whimsical gods, etc. are standard fantasy fare; i.e. yes they're cliche, but it's cliche that fits the game world and even belongs in it.
Using a game to try to send a political message just doesn't cut it. Half the reason people play games is to escape from that crap, if only for a few hours. Letting it be known that you're doing that is going to be nothing but a disaster from the developer's point of view - you're pretty much guaranteeing that about half your potential customer base is not going to buy your game. Besides, political themes are constantly shifting with time. An issue that is relevant when you release your game will probably be old news in a few weeks or months, and your harping on it within your game world is just going to look ridiculous and dated very quickly.
Politics has been allowed to seep into just about every corner of modern life - can't we have just a few places where we don't have to deal with it?
I'm not asking for Crazy Jack the Crazy Kat to come up to me after I drink Skooma telling me drugs are bad. I'm just asking for these ideas to be fleshed out, not provided to me by some government official preaching to me about why racism is terrible.
As a side comment "political" ideas are in most books, movies, TV shows, games, and music and honestly a lot of the time it's interesting. Racism itself isn't really political as it plays such a small role (or at least a severely reduced role) in modern politics in the U.S.