Ommamar: ... I usually had a save before I accepted a quest then one I used while I played along, this strategy usually limited me to 3 active characters. ...
Greywolf1: Nice summary! Although I myself prefer Morrowind, but that's a personal sentiment - I don't like the too similar and too convoluted Daggerfall dungeons - too exchangeable and "un-immersive" for my taste (which includes, to a degree, the hand-designed main quest dungeons, too, as these use the same building blocks and structuring philosophy). Of course, there are navigation strategies, and I can use the cheat teleporting me to the most interesting places of a dungeon (with no safe way back - with that said: I'm aware of the "Recall" spell). But I don't like to play in this way.
To save before you accept a quest makes sense for Daggerfall, due to the huge difficulty variation of these quests. And that the game can't handle more than 6 savegames is an issue.
But why don't you simply use several different savegame folders (holding 6 savegames each) to swap savegames manually in and out whenever it's convenient for you. Either have (at least) one savegame folder for each character you play, or have one savegame folder with the most recent savegame for all your characters (which limits the number of savegames you can operate with simultaneously) and a few backup folders for older saves. It's more effort than simply saving and loading, but still acceptable - for me at least (I use one or more folders for each character, as I don't play more than one character in parallel during a single game session).
I agree that dungeons in Daggerfall can become a drag on the game paticularly the find this thing to kill or worse yet find the item hidden in a back closet of one of these rooms that takes ten hidden doors or portals to get too. I almost always have some connection to the mage guild so I can use the portal spells to get quickly back to entrance if things get to tedious. As for your save solution it is out of pure laziness that I don't take the time to do this. Also I only fire up Daggerfall or Morrorwind when I am feeling nostalgic as I have completed the main quest in both games. So making sure I have all my advancement saved isn't to much of a concern.