I would like to recommend the anti level scaling mods. Daggerfall's level scaling can get a bit extreme and you can later end up with scenarios where you walk into a random room in a random dungeon where four thieves, that can now use magic because of level scaling, cast an attack spell against you simultaneously and you die instantly.

Unleveled Loot by Ralzar:
https://www.nexusmods.com/daggerfallunity/mods/135

Unleveled Mobs and Quests by JayH:
https://www.nexusmods.com/daggerfallunity/mods/51

Meaner Monsters mod by Ralzar (makes some monsters less mean):
https://www.nexusmods.com/daggerfallunity/mods/69

Also, there is a setting in Daggerfall Unity that allows for smaller (still huge by any standard) dungeons:
Go into the settings.ini file and under experimental there is a setting for: SmallerDungeons. Change it from False to True

Although the thread title says "Recommended Mods" without specifying for which game, the first post makes it clear that the thread is about Morrowind mods (and unless I missed a post, the thread has remained a Morrowind-only thread throughout the years). The last post is also not very specific, but from the context it is clear that it's about Daggerfall Unity mods.
To avoid confusion, it would probably better to start a new thread "Daggerfall Unity Mods" and collect all recommendations for DFU mods there.

One thread about mods for all the ES games seems like a really awkward way to do this yeah.

Woops!

Yeah, maybe we should do that.

Yes, and if we could have one for mods that actually work with Skyrim, that'd be great!