Greywolf1: You have to distinguish game-breaking and fun-breaking problems. The "... aged well ..." thread in this forum contains a lot of information about all sorts of problems, plus the (diverse) opinions of several posters regarding these issues.
The latest version of Daggerfall has at least 2 game-breaking bugs, the "void" bug and the "stuck in the wall" bug (to my knowledge, both are described in the UESP wiki). For the void bug there is a workaround, but if you are really stuck in a dungeon wall, there is no other "solution" than to load an older save game (thus don't forget to save the game occasionally). The void bug happens occasionally, the stuck in the wall bug is rare, according to my personal experience (or I know instinctively how to avoid it). Others may have made other experiences, and there are several reports of other game-breaking problems, but no evidence that they have been caused by the Daggerfall software.
Fun-breaking bugs are an entirely different story. Depending on your playstyle and expectations, you may find quite a lot of those, many graphical issues, several exploits, inconsistencies, design weaknesses, etc.
The Arena situation is similar. You find many reports of fun-breaking issues, not many of really game-breaking bugs. i have completed the main quest of Arena at least 3 times over the years, with different characters, without encountering a game-breaking problem.
I myself am a rather casual role-player and I am not detail-minded. I tend not to notice or disregard minor issues. Thus I would say that both games don't have any severe problems for me which would prevent me from playing or enjoying them - but this opinion / perception is not shared by everyone.
So the two are not full of easy to trigger game-breaking bugs as I had feared, and the void and wall bugs sound like they're easily remedied by simply reloading an earlier save or using the Alt-F11 thing you mentioned, even if it is an annoying setback at times. That actually sounds reassuring, I thought the games had huge problems the way it sounded.
Should I install the unofficial community patches for Daggerfall? And what about Daggerfall's save corruption bug? How often does that happen?