It is likely that life on Nirn evolved (if it even did, barring a creation even similar to the Biblical account) in vastly different environments with near-zero ways of being able to have contact with one another. The closest comparison (which is by no means an ideal comparison) on Earth would be Australia or Madagascar to the rest of the world. These two islands are speculated to have broken off from their mother supercontinents long ago, and the life on them evolved to be comparatively unique to other forms of life on Earth. Take Australia as the best example, where marsupials and monotremes are found in much larger numbers than over most of the Earth. To my knowledge, North America has one marsupial: Opossums, while Australia has plenty.

Then, on Tamriel, life also has drastic changes. As mentioned in your GD thread, Morrowind has very alien life. This is far more of a contrast to other regions of Tamriel than Australia to another Earthly continent. It would seem as if for life in Morrowind to develop to the point to where wildlife is alien (meaning unrecognizable, not extraterrestrial) would take a significant amount of time. As a reference point, from what I interpreted from Wikipedia, Australia fully separated from the its last sister continent 60-55 million years ago. So, it took about that long for life to evolve from something recognizable at it's time of exodus, to now, where life has taken a slight derivation. So, I would speculate that it would probably take twice as long to make life fully alien to other life on Earth (which is likely no longer a possibility due to humans and our advancements). But, what is more likely with Morrowind is that there was simply a near absence of mammal or mammal-like animals to develop, so insectoid animals filled the niches instead. Absence of certain animals due to migration issues is probably more likely than 120 million years of complete isolation.

But to shoot down everything I just said, due to the Tamriel Creation Myth, it is unlikely that Tamriel has been around for more than a few million years, so plenty of what I say is speculation, assuming that Tamriel has been around for as long as the speculated age of the Earth.

Now, from blind speculation to the map I found online. It seems that the Summerset Isle and Auridon were once connected. And it looks like the combined island could have fit in the nook made by Cyrodiil and Valenwood, bounded on the far north by Hammerfell. Then, as for Yokuda (which from what I see I would not consider a continent, but an archipelago) could have fit around the Glenumbra region in High Rock.

In conclusion, from the map provided, Tamriel seems to be a massive contient among islands, and Morrowind seemed to have lacked mammal and reptile life, so insectoid life evolved instead. In addition, the unlikely theory that Tamriel is just really old and the continents and regions evolved life differently, could be a reason.