I'd be happy if it stopped telling me my character is old and has nowhere to go but down at lvl 20 and every level beyond. That was kind of annoying.

Balance it like Morrowind.

I still remember getting glass armor in Morrowind and feeling pimp. It was very rare and effective. In Oblivion, I got glass armor and though "sweet!" for five seconds until 10 retarded bandits who have all acquired the best armor in the game like it was just handed out like condoms in college or some shit attacked me with it and I suddenly was rolling in what was the ultimate gear in Morrowind.

Or how when I'm level 1, fresh out of a sewer in Oblivion, and I struggle with a Goblin. Then I get at the level cap, I've saved the world and I am the Lord GOD. Turns out a Goblin peon still takes 300000000 slashes to kill.

Morrowind gets unbalanced at the complete and total end when I have maxed out everything, but that's because that's what it's like when you max out everything. It was still open, but there's a REASON to level up in it. There is content catered to low, medium and high levels. Oblivion however was the same exact amount of effort for every single enemy the entire time. Boring. 0 sense of reward, as it was in Morrowind when I was raped, leveled up and came back and then was the one doing all the raping.

I've never had that problem with any of the peons. I struggled with Scamps and those other mini-dinosaur things when I first went into Oblivion but later on I mowed them down with ease, and the same with zombies and wolves and the like, so I can't relate to that one.

I understand your point about armours though. I've never felt bad about getting good armour and then seeing everyone else has it, though. I figured that was the point of the unique equipment and the enchanted stuff, and tbh it made sense to me that as massive Daedric gates opened and loads of Daedra raped the world people would work harder to arm themselves. Of course I haven't played Morrowind so I don't exactly have a frame of reference to compare it with.

I honestly don't think that kind of levelling would have worked for Oblivion though, for one simple fact; I didn't do the main quest for a long time, and I'm sure others were the same considering the adventurous nature of it all. I did the guild quests, a ton of side-quests and most of Shivering Isles before I began the main quest, and by that time I'd almost peaked. If the levelling was like you're suggesting then I'd have completely raped every part of Daegon's realm and every enemy I faced with complete ease, especially the big boss, and it would have took out every ounce of threat from the game and hearing them talk about these people taking over the world would have been laughable.