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Actually the way it is right now is as far from WoW as it could be. In World of Warcraft, you slay some bandits at level 5, and then at level 85, you slay some level 85 bandits. While it doesn't matter to much in a game such as WoW, it would be ridiculous in a TES game. If I spent fifty hours or so getting my Character to max level, just for him to still struggle with the same opponents because suddenly they've become stronger would break Immersion for me. I like that as you get stronger, you can tackle stronger foes, and challenges that once seemed impossible are now a child's play for your seasoned veteran.

If it was, it would look terrible. The only way to increase the world size is by doing it by hand, and then why not populate the bordering countries instead of stretching out Skyrim? Not sure what you hope to gain from it anyway.

Well no doubt it would be awesome to play Morrowind with Skyrims graphics. But I for one don't really mind Morrowind's old school feel. It's a lot of work to recreate the whole game, and I think you could probably get the same nostalgic feel when you combine old places with new quests, so that old players can enjoy new content. But it's just a suggestion, if you already made up your mind about rebuilding the original game I wish you good luck and look forward to playing it. I would suggest you ask the Morroblivion team for some assets maybe? They already recreated a lot of content in .nif files that you could legally use in Skyrim, since they are fan made (If they give you permission).

You could, however, make a mod that replaces the ingame soundtrack with a library that the user provides. This way everyone can pick his own prefered soundtrack, and the legal obligations lie by the user and not by you, thus making the mod legal. You could put your list of tracks somewhere and let each user decide how they 'acquire' this music.

So you are recreating Morrowind with all the original quests? Because quite frankly, without trying to put you down, I can't see you doing a better job than the original. Perhaps rebuilding Morrowind, but adding original content that is set in the same time as TES5 would be a lot more fun?