I think most mods are reasonably compatible, but I don’t really use a ton. OpenMW even has graphic herbalism built in these days, so the only thing I run now is a mod to delay the Dark Brotherhood attacks. I think the main issue is mods that require the Script Extender (MWSE).
I’ve completed several playthroughs of Morrowind on OpenMW, and I’ve found it to be superior to the original engine in every way. The only thing that you might have issues with is certain mods may not be compatible with it, but I don’t really use mods.
Daggerfall’s a huge game, but it gives you a ton of freedom in how you play. Once you figure out the basics, it’s a great dungeon diving experience. Although the procedurally generated dungeons aren’t everyone’s cup of tea, since they can get pretty crazy sometimes. I would highly recommend a teleportation spell (mark/recall all-in-one).
I’ve seen OpenMW mentioned (and it’s fantastic), but you might want to check out Daggerfall Unity as well. The game’s available at no cost, and you can find a zip of the necessary game files on the install guide in the dfworkshop forums.
It’s way better than the old DOS version, and it supports mods, too.
Maybe try out Kingdoms of Amalur? I don’t know if it’s quite in the same spot for me, but it’s pretty similar in a lot of ways.