Immersion: NPC and Voice mods
As I ranted in my intro, I do not recommend NPC packs as they often contain bad apples between good stuff. To avoid inconsistencies that can break immersion, here is a list of small but impactful plugins that add lore-based or artwork-based NPCs from Bethesda design docs (Note: this enrich mostly Vvardenfell island, as Tamriel Rebuilt has its own rich world of inhabitans which are crafted with great care)
Install using MO2:
Umbra Blademaster (overhauls the death-seeking Orsimer into a true challenge) Here are some immersive NPC mods from modder RealAshstaar, based on og Morrowind artworks and non-implemented content. They are small but bring a lot to the island of Vvardenfell. Selection based on compatibility with later "Beautiful Cities of Morrowind" and other mods:
Daggerland Voice mods: greatly add to the liveliness of the world without bloating content
Quest Voice Greetings (Full-AI voice is too much, but this does a great job at offering some lore friendly dialogue triggered on encounter)
Idle Talk (great collection of voice entries, vanilla voices; makes the came feel more natural without adding NPCs)
Nordic Banter (nord smiths comment on equipment, weapons, fits very well)
Run mod integration quickly:
Run MO 2
Run PLOX (via Mo2..) > Accept
Run Tes3merge. Space to exit/close
Proceed with Sound and Weather mods
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