Cities in Oblivion were bigger

[Balakirev]

Oblivion's cities always did feel ghostly to me, too, because the engine had trouble cranking up speed with enough NPCs present. I've used mods to increase NPCs, and it really does make a great difference in terms of creating that "city feel," but it also dropped me to about 20 FPS. I've selectively cut back, and am only using population increasing mods on a few cities. But Skyrim's villages just feel like hamlets to me, tiny places that shouldn't be able to support the kind of lords and halls they have.

 

I think Oblivion feels smaller to some of us than Morrowind (including myself) because Oblivion uses a monotonous land covering for much of its landscape, and much more subtly different house styles in one basic architectural style. Morrowind had a number of major geographical regions, and a large range of distinctive architectural styles. Morrowind's geographical and architectural diversity, as well as the diverse views of its inhabitants, make it feel larger.