I've been having a blast with Arena so far. I got three of the eight staff pieces and I'm pretty well geared up, I got the Oghma once (thinking of doing it again) and I like the insanely large story dungeons.

However, now that my stats and gear are OK, all I do is dungeon crawl, go to town, fix up/restock and dungeon crawl again. It's a good gameplay loop, and I'll follow it to the end, I'm not bored with it or anything, I just wonder if Daggerfall has better quest variety.

Second question: even though my RPG class of choice is Mage in every single RPG to date, I chose a purely melee class for my Arena playthrough because it just seemed less headache-inducing. Now that I got the feel for how combat works in pre-Morrowind TES games, I'm thinking of switching back to Magic for Daggerfall.

How is using Magic in Daggerfall? I'm especially interested in the starting bits. I can't imagine starting Arena as a Mage, I can see how they can become OP pretty easily once they get some decent spells, but starting out in these games just seems so hard as a magic user. I'm not new to min-maxing and buffing and such, but I am completely new to the whole spellcrafting system and so on. Any tips? I find tips on what NOT to do and what NOT to spend points/skills on the most helpful.

Lastly, does Daggerfall look at least a tiny bit better than Arena? I play on a 27" 1440p screen and I need to take a break from Arena every once in a while otherwise my eyes physically hurt.

I would recommend giving a mage class a try in Arena some time, just so you can experience the Spellmaker in its original incarnation. Once you know how to leave the starter dungeon quickly, it's not hard to reach town at a low level, then go to the Mage's Guild and make some basic spells. Also, you start with a nice healing spell, regardless of spellcasting class.

As for Daggerfall:
* Quests are more varied. In particular, it is actually best to avoid dungeon crawling quests at first, as Daggerfall dungeons are notorious for being monstrosities often referred to as "mating octopi", not to mention the ground in them not always being as solid as it should be. In particular, you are going to want to have a decent selection of spells, including levitation and teleoprt (and set an anchor ahead of time) before you start to explore dungoens. (Of course, the starting dungeon is an exception, but it can still be tricky to new players.)
* In Daggerfall, it is generally recommended to play as a custom class; in particular, you can get a Sorcerer's high SP without the inability to recover spell points by resting by playing a custom class. In Arena and Daggerfall, magic tends to be quite powerful, but not something you'll be using constantly; in Daggerfall it can be used effectively for healing (regen health is overpowered in this game), and for Continuous Damage to kill more dangerous enemies, or groups of enemies, faster.
* In Daggerfall, there's no such thing as a purely melee class; the best you can do is approximate it with drawbacks that prevent you from casting spells when there is and isn't light. (Surprisingly, those two conditions don't quite account for 100% of the time.) It feels like the game *expects* you to having some spellcasting ability.
* Playing a mage in Daggerfall isn't that bad once you get to town; just join the Mage Guild, make a decent Continuous Damage spell centered on caster, and stick to Mage Guild quests that don't require dungeon crawling. If you are short of money in the early game, you can take out a loan from the bank and pay it back later. (A year is *plenty* of time, and money becomes more plentiful at higher levels.)
* Daggerfall looks a lot like Arena, but I actually have more of a headache with Daggerfall because of the fact that the game is fully 3D, meaning looking up and down is sometimes necessary. (This is in contrast to Arena, which doesn't let you look up or down, and where many collision checks (including spells) ignore height.)