Xander:
Sorry I didn't reply to this before. I usually just browse the "Active" list so I often post in a thread and then totally forget about it.
I agree with a lot of your gripes about Morrowind. I think the game world is huge but very lifeless. And the NPCs are weak. I was a little disappointed the first time I saw them milling around in the street at 3am at the same spot they were earlier. In NWN it isn't much different. This is not a game where the NPCs go on about their lives. In fact I can't really tell you why NWN is better than NWN, only that I got bored with MW and stopped playing, I finished NWN. It might have something to do with getting sick of trudging back and forth across vivec.