You can say the exact same about Skyrim. The cities are hardly cities, although they did make them much more unique (at least some of them) and I forget then name but the fortress one in the north-west felt really well done.
Have to strongly disagree - the landscape in Skyrim was actually handcrafted (
quite well, apparently), and all the regions are very distinct. There's some seriously majestic vistas - the huge mountain of course, the vast open tundra plain, the amazing lunar landscape of the hot pools, the creepy swamp toward the north, the craggy verticality of the reach, and of course the icy wasteland of the far north. And they're all chock full of interesting little locations. Oblivion (which was literally procedurally-generated, as I understand) just had forest, slightly more yellow forest, slightly more jungly forest, slightly more snowy forest. There was just nothing interesting to see, ever. And in Skyrim, the various old ruins etc actually fit into the landscape, rather than just being cloned and plopped down equidistantly. They make some sort of sense in their location. On top of that, one thing I think Skyrim deserves considerable praise for is that they put a hell of a lot of work into making all the dungeon interiors somehow a bit unique - they all tell a story or have something different or interesting. Every one is an interesting find, whereas Oblivion's are pretty much just dull clones (quite literally in many, many cases, if you fire up the editor). Apart from loot/xp/quest McGuffins, there's really no reason to visit any of them for their own sake after you've seen two or three. And the less said about the oblivion gates, the better.
Granted the cities are tiny in Skyrim, but that was always the case with the majority of RPGs (Daggerfall being the very obvious exception). There's always a balance between "realism", hardware capabilities, where to spend development time, and the gameplay aspect of whether it's actually fun to be constantly running through five hundred samey streets every time you go to town - and you can certainly argue that you think they got the balance wrong in terms of city size. But I don't care so much about that, I care that what there is of the "cities" got so much more thought and attention than the flat samey-ness of Oblivion's towns. I personally really like Skyrim's cities/towns.
Essentially, Skyrim was a constant stream of "wow" moments for me; whenever I'd go somewhere new I'd be impressed by what I saw. When I first explored Oblivion, I just had a constant sinking feeling of "is this it?". Every time I thought there might be something exciting just over that hill, it was just the same disappointing thing I'd seen over the previous hill.
Eh... it all fit together pretty well, it just didn't feel like a fantasy world, but it was a decent medieval Europe world (which wasn't terrible exciting).
To me it felt like the whole thing could have sprung up fully-formed the day before. There's six (i think?) disconnected cities and pretty much nothing else in what's supposed to be the epicentre of civilisation. There's no history to the land, it looks like completely untouched terrain except there's these inexplicable ruins plonked down here and there. Morrowind and Skyrim are harsh, hostile border provinces that have also been torn apart by strife since well before your character arrived, so it makes some sort of sense that civilisation has retreated within its walls. And they feel so, so old. Cyrodiil feels to me like a brand-new border province, with a few colony towns that haven't been there more than a generation, and nobody has had time to tame the land yet.