The player character can become nude, plus several NPCs can be nude for whatever reason (although there are no visible genitals/nipples, either there being none or they're covered by the character's underwear)
There is also a scene during the Great House Hlaalu questline involving the character Crassius Curio where the player needs to strip naked in front of him, or else the quest will be unable to progress
A multitude of demons and multiple Hells are integral to the setting of the Elder Scrolls, and it's difficult to really dig into the plot of Morrowind without talk of both.
There is a race of Daedra that heavily resembles crocs and gators, called Daedroth, and there is a race of people's called the Argonians, who can resemble them depending on their facial features
Skooma and moon sugar are addictive substances that are referenced by multiple characters. A main character, Caius Casares, is implied to be a skooma addict, and a skooma pipe can be found in his house, but it could also be part of his cover.
There are many large bugs that are enemies, including giant beetles and large worm-like creatures. There are also many egg mines to explore that contain colonies of Kwame, including a Queen.
Also, Silt Striders are enormous arthropods that are in almost every city, used as transportation.
The House Hlaalu quest line requires you to get naked in front of Crassius Curio to proceed. He literally will not do what you need him to do if you decline.
At another point, during the Tribunal Temple questline, a Dremora threatens you kill you, then "rape your corpse gently."
Slavery is legal in the province, and you can encounter bound slaves. They all wear a slave bracelet which has crippling effects to prevent them from escaping. In most cases you will be able to kill the owner and find the key to free the slaves, though.
Within 30 seconds of leaving the starting town, a wizard falls from the sky and dies after a spell gone wrong. The player has the ability to take his spell scrolls and may recreate the fatal fall if not careful.
The corprusarium in Tel Fyr strongly resembles a sanitarium and contains patients that are violent and cognitively impaired due to the effects of corprus disease.
Corprus infectees have black cysts growing all over them. They use them as both grenades and emergency rations. Their skin is also discolored to a necrotic shade of brown, implying their bodies are rotting while they're still alive.
There is an Easter egg item called "Eltonbrand" where once it is received, the character you get it from exclaims "Go to hell, Carolina!"
There is also the character M'aiq the Liar who references the Elder Scrolls fan base and removed features (though, this is a more loose definition of breaking the 4th wall)
There is fantasy racism. The Dunmer are generally quite xenophobic to everyone including the player character, even if you are also playing as a dark elf. Khajiit and argonians are particularly regarded poorly and referred to as "beasts" and in some cases are even enslaved.