Heartwood and the other furnishing materials like Mundane Runes come from the resource nodes that you harvest in the world instead of the refining of raw materials.
Still waiting for answers about class set aura behavior, and also hoping that one day hair dyeing will be an option. We know it's canon thanks to a book in the Manor of Masques! (House of Reveries: The Troupe)
Proud owner of a Morrowind Banner of the 6th House (back when it actually meant something)
While Heartwood does come from resource nodes it does not come from any nodes gathered from surveys. I don't know why it's this way but it really needs to change.