Let's just all agree that when they had a god come down and TRANSFORM a unique tropical aztec dragon kingdom into Default Fantasy English Countryside #2,037,432, Bethesda demonstrated that they can't be trusted to respect their own setting.
That said, removing levitation is fair enough; for one thing, city walls make no sense at all when an appretince alchemist can take half a day and whip up a vat of potion that can levitate a whole army over it, and a good wizard can fly them all over with one spell, and a mere novice can turn a crate of old boots and rat souls into a permanently flying army. I would still prefer that levitation or flight be in, because it is extremely liberating, but some balance for that is needed, both to explain why people bother building anything with walls, and to keep players engaged with the actual terrain instead of taking straight-line courses everywhere.
Perhaps in addition to duration spells, there's "concentration" spells that you must keep expending magica to use and which exclue many other tasks. (Actually, that'd be neat for healing and shield spells, too.) Levitation could be very expensive, so expensive it would take a very, very high-level mage to cast a spell for more than few seconds without using concentration to make it last longer at the expense of not being able to use attacks while flying...
Dwemer were awesom. I say we have the next one be set in a dwemer moonbase on the far side of masser.