I think the mods certainly make a huge difference, I just downloaded "The White Wolf of Lokken," (requires Bloodmoon) and it is a truly amazing piece of work! Challenging, good story, decently-developed NPCs, new landmass... gorgeous graphics.
But I also think it is a question of focusing. The game is so completely open-ended, that it can become very easy to just wander aimlessly for long periods of time. This is fun, but for me, if I do this too much, I begin to get a bit bored. When I first began playing Morrowind, I definitely experienced the "wow" factor, but I did not really stick with a series of quests, and I created endless characters. Even though I found this enjoyable in some ways, I began to lose interest. When I returned to the game I promised myself I would stick with one character, and actually complete some guilds, the main quest etc. I have done this, and entirely enjoyed it, now I am exploring Solstheim, and the excellent mod I mentioned above
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