so your saying you can use whatever bethesda uses, and you can also use what you want to use... So your saying that you could make a goblin v falmer war?... I think I might by the creativity kit... one last question, is their an introduction to this? and is code based, and would it take a fair understanding of software to use it?
You'd need to create a goblin mesh and texture which would be highly time consuming and the learning curve for meshes is pretty high. However yes, it's entirely possible.
It's a bit of everything. You'll need to learn Papyrus (the scripting language) if you want anything more than a basic house or dungeon done, however you'll need to learn the CK too, it depends what you want to do.
The http://www.creationkit.com would be a good place to start. Don't expect to be able to make an expansion pack overnight mind. It takes a long time to learn.