I am unsure how long it will take before I begin ranting about everything I love about Morrowind... Worst grammar ever, but it's true...
Ummm.... Well, first I should directly answer a few of your questions.
I honestly don't know why so many people dislike the combat system of Morrowind. It's crazy complicated and involves a large formula. I suspect the problem being: To your typical person, it is hard to imagine what's going on behind the scenes when the game simply says you missed. In my eyes, combat could not be any better. That said, it isn't at all like Oblivion or Skyrim. The game decides if you hit your opponent.
Both Melee and Magic oriented types become crazy mid to late game. It doesn't hurt to split between them, but obviously for RPing and such, you won't have a problem. What class would I choose specifically? I really enjoy Battle Mages honestly. This usually ends up drifting into an everything character because that is my main goal... One thing to note: In Morrowind, you can never truly do everything. And if you get close, you'll realize there was something you missed earlier and cannot do now. It is a truly remarkable quality, and that alone opens up hours and hours or replayability. I don't believe it really matters which class you choose, as long as it's your thing...
I am at least glad you're someone who isn't rattled by graphics. I've never found 'outdated' graphics to take away from immersion. After all, it's your brain that puts you there...
I don't know, Kohlar. There is a long list of treats in store for you. Unique weapons that are unique in design and effect. A myriad (not literally) or unique amulets and rings... The Necromancer Amulet out of Skyrim is literally the only item in Skyrim that lives up to what Morrowind set for the stage.
...people running after you screaming, "N'wah!" Oh, the memories.... I should stop here... Ask more questions if you'd like. I'm sure I'll be able to answer a few.
Cheers