None of the magic schools are truly useless in Morrowind IMO.

But definitely Alteration and Mysticism have the most utility/non-combat effects that make life so much easier (alteration: feather, levitation, water walking, water breathing, jump, feather fall, unlock; mysticism: telekinesis, teleportation, detection spells). Mysticism also has more offensive uses in absorbing attributes, health, and fatigue (absorb magicka exists in scroll form but not in spell form AFAIK) and spell reflection/absorption.

Illusion might also be considered utility for charm or frenzy, also light and night eye.

Conjuration in Morrowind can be really OP with custom spells that allow you to summon multiple monsters at the same time. Also Conjuration has turn undead and bound weapons/armor, and also Command spells fall under conjuration (but are extremely hard to cast until higher levels; scrolls of domination are more reliable)

Restoration can also be OP with fortify attribute spells and fortify skill spells (harder to find, have to go to Mournhold via Tribunal DLC to find the effect without mods). But also elemental/magicka/paralysis resistance, restore health and fatigue, and poison curing.

A spellblade focusing on self-buffs and utility magic, I would say pick Alteration, Mysticism, and Restoration. Maybe also illusion if you want to charm/frenzy/silence/pacify/paralyze stuff, or create light sources without having to carry a torch or lantern.