Well, some of it is better in Oblivion but some things ain't. First, province of Cyrodiil is incredibly dull. Grass fields everywhere, which makes random placement of daedra shrines even more obviously work of C&P designer.
Then cities. Not just that they are closed entities which sucked compared to previous games, but they are also boring and pretty much the same. Very few (those at the north) have some variation, rest are pretty much the same. Town square in the middle, houses left and right, few castles. If there's a river put a wooden bridges. Didn't spend much time in those cities myself.
Dungeons are baad, a lot worse than Morrowind and that is where I think Skyrim is better than both predecessors (dungeons in Skyrim are quite neat, interesting and varied, have few env. traps, not bad). Daedra shrines are dull in every game, it is the nature of them. Doubt Bethsoft can make them interesting.
Then comes the worst part of game world, oblivion... that is pain in the ass. Traversing oblivion really depicted hell nicely because it is incredibly dull, repeating and feels like grinding every damn second you spend there. Hates that portion of the game.
Bandits suck, randomly spawned, no logic used whatsoever. Vanilla game constantly spawns glass armored bandits for bigger part of the game and that looks hilarious and makes no freaking sense.
Mechanically, Oblivion was better than Skyrim. Had few interesting side quests (main quest is utter garbage, but slightly better than viking dragon slaying story of Skyrim). But the world of Oblivion felt fake, you could see the cheap way they designed it straight to use of SpeedTree to generate foliage. It was like scale model of grassy hill we used to make from clay in third grade. Not to mention worst thing about it. Felt incredibly small and you could easily reach world boundaries, something you can't do in Morrowind due to nature of game world (being an island or smaller continent).
But my biggest pet peeve with Oblivion despite horrible main story, mostly boring quests, game world feeling off... was lack of levitation. In late Morrowind game I never used my foot, it was either flying or jumping high for the lulz. That change was done because of bloody consoles, no other reason for it really. Since this day levitation isn't possible in modern TES nor we have proper streaming of data to allow huge cities being open. Fuck Gamebryo!
I actually found the landscape of Oblivion rather beautiful to be honest, and, where there isn't much around, mods fix that issue :p
Even if not by much, and even if Oblivion had the occasional dialogue option (however meaningless), I think it had even worse writing than Skyrim.
Skyrim obviously would have better writing as it's a newer game, however, Skyrim is still miles worse than Oblivion in terms of well.. Pretty much everything but graphics and dialogue.
Oblivion's dialogue was more of a comedy sketch to me than anything, the random shit they blabbered about just made me laugh, but it never detracted from the game itself in my eyes, or rather, the lack of decent writing didn't lessen my experience.
One thing I do miss is the DLC houses/keeps, I always remember walking up to my very own castle guarded by my own personal order of Knights, it was pretty fucking awesome. Same thing with that Wizard tower, the location and just the way it looked was really really good. The landscaping and just general feel of Oblivion is just so much better in comparison to Skyrim.
I've yet to really get anywhere still in Morrowind, once I got stuck and couldn't find where I was going I just sort of gave up and haven't played it since (I'm feeling a strange sense of De Ja Vu!) - Funny how me getting lost and just having to wander around aimlessly detracts from the games experience.
