Which side-quests are available early in the game which would contribute to a characters leveling progress?
before my answer it should be noted how Morrowind's leveling system works. you don't gain EXP via completing quests or killing stuff. you gain "exp" by leveling up the Minor and Major skills you selected/were assigned to you at the start of the game.
these skills are leveled up by doing actions which relate to that skill such as with weapon/magic skills you use that weapon/school of magic. with security you need to lock pick. with Stealth you need to sneak while undetected.
As you level your skills up it takes longer and longer for them to level up. after leveling up a skill 10 times you can them sleep to then level yourself up. as such quests only give you tangible rewards and the opportunity for you to use your skills so it's entirely possible for 2 people to do the same quest in the exact same way at the same stage of the game but one of them completes it without gaining anything that contributes to them leveling up because of how they built there character
There are a couple of quests in Seyda Neen which have low combat and net some cash rewards. one of them where you investigate the murder of the local tax collector does have the choice of killing the perpetrator but if you do then you can loot everything in his house, sell it and even use his bed to sleep in safety. there is also the Smugglers Hideout just a bit past the Silt Strider port. there's only one Mage there which can be a problem but you can grab the loot there and sell it, and even make some friends with some Argonian Slaves
Because your Stats only increase at level up (outside magic effects) as I said above doing quests will only net you cash and items that if you want, sell for cash. however there are some skills you can work on without really leaving Seyda Neen or entering combat if you set them as a Major Skill
- Athletics: running around
- Acrobatics: jumping. the skill levels up faster if you land and jump again quickly so jumping up slopes like in Vivec can level the skill up quickly at first
- Speechcraft: (untested): using the persuasion options.
This reinforces what I said about at the start about how a player doing the same quest as another might not again anything that contributes to their level. in the quest Fargoth's hiding spot it has no combat but as I generally always select athletics and acrobatics as my skills I can level up in this quests by running around and jumping while i wait for night to come while another player doesn't because they don't do it
Armor wise in Vanilla Morrowind I am generally able to get a full Bonemold set from the armorer opposite the Mages Guild in Balmora just from trading Dwemer Coins from Arkngthand which you go to in the Antabolis Informant Main Quest. Caius Cosades will also give you 300 coins if you bellow Level 3 however even Bonemold Armor wont be helpful if you wont train up your stats (which you have to do to do) also generally the first quests of the Fighters/Mages Guilds and the Great Houses are designed for new players
If you're ok going down a dark path you can generally kill people who live alone without it being detected as a crime so you can then loot them and their house. for instance the woman with the Rat problem in the first quest of the Fighter's Guild can be killed and you can claim all her pillows to sell/trade at the pawn shop
early game spells hurt like hell so stocking up on health potions is a good idea (you can get free ones from the chest in the Balmora Fighters Guild if you join). if you're hit quickly open your inventory and use 1 or 2 to create a sort of Health Regen effect to negate the damage of the spell
if you have the Tribunal expansion on PC be wary of a Dark Botherhood attack when you sleep. on the Wiki it states how you can avoid the attacks at the start
If you wish to rest without being attacked or beginning this quest, use the bedroll in the basement of the Census and Excise Office in Seyda Neen. The attack script excludes that interior cell to avoid breaking character generation, and continues to exclude it after character generation is complete.
and since you need to sleep to level up a new player might be creamed by an Assassin at their first attempt to level up. also as it's an interruption to your sleep you don't level up so it's possible to fight a Dark Bortherhood Assassin at level 1 when you try to get to Level 2
when I start Morrowind however i use the console commands to alter my stats to reallocate points from my skills to my main weapon skill (my case is generally Long Blade) because of how often it misses. using
player->SetSkill [Skill] ## i set some of my Major Skills lower and add the different to my Long Blade. ie.
In a way it's cheating but it's an unfair system when a spell at range can always hit you but at point blank sword and bows will miss your enemy frequently at low skill levels