The main gameplay loop in The Elder Scrolls II: Daggerfall is the same as The Elder Scrolls: Arena, which is dungeon crawling. But unlike Arena, Daggerfall's loop can still be enjoyed, especially if you're using the Daggerfall Unity mod.

That said, the first dungeon is ruthless and requires either min-maxing at character creation or avoiding mobs altogether (there are imps that you literally can't damage with equipment you can find in said dungeon) which I thought was really weird.

The biggest issue of Daggerfall is that the randomly generated dungeons are many times broken. The first quest I took to go to a dungeon gave me a broken dungeon where I couldn't complete the quest, which I only found out after being there for hours and clearing it out completely. This can be very frustrating and I feel like this would've been a good game even to this day if the procedural generation was more robust. Which it isn't.