When playing Morrowind in modern times, it is right and correct to arrange the dialogue window on the side, tall and not wide, Disco Elysium style.

Benefits:

• Better line length for readability (~50 characters per line instead of like a billion)
• More lines to see dialogue options without scrolling
• Does not obscure the lower portion of Hentus Yansurnummu's body, so that you can fully observe his shame and indignity after having his pants stolen by Hainab