Hello Zenimax and forum dudes, I have a few suggestions that would really make the world feel alot more alive.
1. Add trade caravans wandering the roads, but only at certain times of the day. There's not alot on the road between locations, other than the occasional delve and fissure. Sure, there are wandering merchants, but there are no caravans. It'd be more realistic to have several people going around with the traders. But only have the caravans wander around in the daytime. Also make the caravans stop for a while at towns, cities and villages to sell their wares. These caravans wander the road from the early morning, setting out from a city, and going along the road, stopping at certain points, until night time.
2. Make the night more interesting and dangerous. In its current state, nighttime is only for aesthetics and for Werewolf/Bloodfiend spawns. I think that night time could be made more interesting by:

• Make the night slightly darker.
• Add patrolling guards wandering the road at night to watch for bandits, highwaymen, and other unfriendly things.
• Add highwaymen and bandits running around at night to ambush an unsuspecting player. If a patrolling guard and a bandit cross paths, they'll fight until the best man wins.
• Make the night spookier by adding creepy ambient noises (like the ones in Minecraft), creepy music and making certain ghosts and spirits stealthed.
• Add bandit camps to the world from which bandits and highwaymen spawn. If a patrolling guard stumbles across this camp, he might call for some reinforcements to attack it, which will contain rewards!
• When nightfall comes along, make it so there are much fewer NPCs on the streets in a city. The people of Tamriel must sleep too! To combat the problem of no merchants, you could put in night shifts so while one merchant is sleeping, another comes along at night in his place. Close certain shops at night though; not every merchant has someone to go in his place. This won't force players to run to a city when it's sundown, since there'll be trade caravans on the road! They'll stop when it gets pretty dark though.

3. Make NPCs more interesting. With NPCs I think you should go the way of Watch Dogs, that game's NPCs are brilliant. Some are casually walking around, some are drinking a coffee and some may be putting up posters and signs on buildings and lamp posts. To make ESO's NPCs more interesting, here are some suggestions:

• Have NPCs do more activity, like talking to eachother or walking to a tavern. ESO kind of already has this, but it's a simple system with not much going on. There's very little non-quest NPCs that talk whom's speech isn't directed at the player. NPCs should definitely be alot more active. Just add certain NPC behaviors that make them do certain things that make sense, like going to a bank, talking to the banker and then walking to a shop or tavern. Or make them sit down on a bench or chair reading a book. This one simple thing can completely add another level of immersion to the game.
• Add more things for NPCs and players to say. Every time I talk to an NPC it says the same exact lines like it was a broken record with no options for the player. Instead of "Hi, hi, hi,"_ NPC, "Goodbye, Goodbye Goodbye,"_Player, it could be: "I've heard of you!"_NPC, "Am I famous?/"You're awesome!/Go away, stop wasting my time!"_Player.
• Reputation and Disposition is a MUST. One of Oblivion's best AI features was absent in Skyrim which made NPCs have the same attitude towards you no matter what you did. This feature will most likely come with the Justice System in 1.4, but if it isn't, a reputation system is a must-have for each NPC! What's the point of being a noble, life-saving hero when everyone treats you the same way? There are definitely rewards for having a high disposition, like being able to make an NPC your follower, or having them leave you gifts or special information like a Skyshard location.
• Add more depth to NPCs. This was one of the things that made Morrowind so special. Every NPC had a past and a background, and every NPC had something to say on a given matter whether it was useless or very useful information. All NPCs had their own personality. If everyone was the same, it would be a very boring world indeed.

Those are my suggestions for adding an insanely higher level of immersion to ESO. What are your thoughts? Hopefully ZOS sees this and implements it