Intro: I have browsed the site, but have not seen a plan for a Arena remake with any idea how programing works.
Dealing with the Flat and 2D World: Data-mine ESO for the terrain's bump-maps (they are split into holds) and piece the bump-maps together in the Unity engine. We procedurally generate trees and bushes using perlin noise.
Texturing: we create 16 different textures for grass (or lackof) and plants. 1 plant texture per season for forest biomes, 1 plant texture per season for desert biomes, 1 grass texture per season for forest biomes, and 1 grass texture per season for desert biomes. Other textures would be static and easy to find as royalty-free.
Buildings: handcrafted interior and exterior. Caves and Dungeons (since less complex should be generated with perlin noise.

Oh, dear, prepare to be
Oh, dear, prepare to be berated by people for having big ideas but not working on them. Like the last guy who tried this.
But I'll give some input anyway. ESO's terrain map is very inaccurate and weird for certain places. Instead I suggest something similar to what the people remaking Fallout 1 are going for, in the Fallout New Vegas engine. Instead of creating a singular large world, they create multiple large areas, and leaving each area brings up your fast travel map. You would need a separate map space for every city, town, village, main quest dungeon, and artifact quest dungeon. Each would be handcrafted, and the background area surrounding each can be low LOD ripped from different games or created from scratch. As soon as you walk out of a dungeon, or town, and far enough into the suburbs, you will be given the fast travel map. We can use Skyrim, Skywind's version of Vvardenfell(because Morrowind's vanilla red mountain was shit), and Tamriel rebuilt's Morrowind mainland. For the others, the landscape would need to be handcrafted. It would basically play just like the original Arena in this aspect.
Inconsistencies with modern lore will be dealt with. 3D models for enemies. Characters in towns with actual depth. Probably make the towns either much smaller or have many buildings which you can't enter or just be filler houses like the original Arena. Give each dungeon a unique appearance and look like their versions in modern games(i.e. Labyrinthian and Dagoth Ur). Possibly add all the new cities of Cyrodiil and the Imperial race.
Again, I'm saying, if we don't bring up anything this whole thread is just asking for ridicule.