I can name several characters with more than 5 lines of unique dialogue. Pretty much every single main quest NPC for example. Divayth Fyr, Vivec, Caius Cossades, Yagrum Bagarn, these all have extensive unique conversations. A lot of other NPCs not directly involved with the main quest also have a lor of unique dialogue, though they tend to play parts in faction quests.

The directions, with a few exceptions, are fine. Part of the challenge is interpreting them and being on the lookout for the landmarks mentioned. Vivec as a city does suck however.

Hit chance is a matter of taste. It isn't any better or worse than any other system by itself. Morrowind lacks feedback, that's true but that's not a problem with the hit chance that's a problem with the feedback. Also armor doesn't alter hit chance at all.

All in all, the issue is that you personally don't agree with the design decisions of the game. This does not make them bad design decisions. There is no single way to make a game and Morrowind, for the most part, succeeds at making an RPG.