Imo, a must have plugin is your own personal residence, you can stash tons of goodies in them. I have two residences, one in balmora, the other in Vivec.
And yes, there IS sex in Morrowind, although you don't get to see it. It's a plugin, and if i'm not mistaken you can go to that town where there's a nightclub (forgot the name), and "rent" a woman for the night. It actually improves some of your skills, like endurance.
