My main issue with Oblivion is that you can totally cheese your way through it without paying almost any attention to leveling and stats, because the AI is horrifically bad, and the Gamebyro Engine was showing it's age since Morrowind. Everything from Morrowind to New Vegas more or less runs off of the same game engine, so if you ever wonder why some of the same kinds of bugs crop up from game to game... Well, there you go.
The main change from Morrowind to Oblivion is that it's no longer possible to miss a shot, or be missed by your opponent; it is the shift from RPG with Action elements to an Action-rpg. I preferred the old system because being a low-level character made you feel like a low level character without any real skill. Your ineffectual flailing with your weapons merely made you tired rather than bring any harm to your enemies, and on the off chance you did hit, the damage was variable and lower if your skill was low. In short, low level characters aren't going to be killing anything stronger than a few rats or wild bugs with any kind of ease until they grow and develop, find or buy worth while equipment.
Oblivion combat could be summed up as, run backwards, cast the fireball spell you're given freely at the beginning forever. This continues to be a viable, working method of defeating any number of enemies, any kind of enemy, until the end of the game.