In dragon Age Origins you can stumble on people who gossip about events in the game, like people you saved/met/killed. Quest's being solved by you and so on. This might be something for Skywind. Unfortunately it's a long time since I last played Morrowind, so I wouldn't be of any use writing the scripts. But I do have some experience writing since theatre was my major in Highschool. So if anyone has the time and would like to work with me with me on this I'd be very much grateful.
My email is "Matilda.Reftel@gmail.com"
Cheers from Sweden /Matilda

We have already written some
We have already written some stuff like this as 'Idle Banter', which adds literally thousands of lines to most every NPC in the game. Some of it's gossip, all of it serves to flesh out the NPCs as characters.