There are lack of villages or hamlets in the Elder Scrolls?

Am I the only one noticing that in TES games, especially Oblivion, there is a lack of villages or hamlets? Granted, you could say the Cyrodiil is supposed to be the Cosmopolitan province, but I felt like a lot of the "cities" like Chorrol and Bruma felt more like towns with a massive chapel and castle thrown along to seal the deal. The only city that was even close to being one was the Imperial City, but the division of the districts, some of which didn't seem to offer any real service like the Arboretum and Prison, really hindered the feeling that you're living in another world. Morrowind kind of had this problem too. The fact that both these games had so much space that was unused and filled with creatures and bandits, adds salt to the same.

I thought Morrowind's balance of larger/smaller cities was about perfect. Oblivion could have used a couple more small towns, though it was acceptable too. My major complaint with both games is the lack of INNS. Oblivion's small towns almost never have a place to stay. Some of morrowind's medium size towns lack an inn. Yes, cities of all kinds in Morrowind and Oblivion are smaller than what's realistic, but it's very difficult to hand design huge cities, and they can get pretty annoying for the player to try to navigate. I don't think it's worth the effort personally, as long as you have at least one large city, and both Morrowind/Oblivion did.

It never bothered me in Morrowind because Morrowind was supposed to be rather backwater, at least vardenfell was, because it was only recently allowed to be populated with non-temple people. It bothered me in Oblivion, mainly because the little towns were so far out of the way. I'd preferred if we had some hamlets that were actually decently accessible. One of Oblivion's crushing flaws was an insane lack of variety in the fauna and enemies you encounter in the open. Daedra-wearing Bandits are so prevalent in the world my character has killed thousands of them.

Daggerfall had dense cities. Mind you, not population wise. It'd be interesting to see an assassin's creed approach and crowd the cities, mind you, the engine would chug big time. Oblivion has already started with marauders not having legitimate names and Fallout 3 furthered this by populating megaton with Megaton settlers. It would add a whole new level to finding the right person to talk to. Who knows we could even throw in some perks attached to speech craft that enable a better chance of asking someone if they know the person you're looking for.

To turn that around: What good adding more people would really do? If it's even shallower interaction it would only give an ability to kill more people. I prefer small and focused population over GTA style random people minding their business. That said I didn't find Oblivion's cities too small or empty. Removing the load zones in IC would have made it a lot better though that way. I hope that you are able to understand what I am trying to say.

City size has to be appropriate to setting. MW was a backwater district recently opened for settlement. It seemed right to me that it lacked large cities and towns. I would've liked a couple more towns the size of Caldera though and a lot more hamlets and villages full of guar herders, egg miners and farmers. Prior to the late 18th/early 19th century 90% of the population worked on the land in our world. DF had the cities, towns and villages in abundance but apart from the odd animal wandering around the settlements no sign at all of agriculture.