You may have compatibility problems with Morrowind because the game is older than Windows 7 and so they don't support each other. That said, there are various workarounds which you could likely employ for near flawless gaming (that's if you have a problem at all - having just googled some people don't.)
As for your playing Oblivion, you'll have difficulty. I believe it will run, but you'll need to significantly lower all your visual settings to get it playable, and even then your frames per second will be very low (20 maximum I'd say) which'll lead to choppy gameplay. The game won't look that great at all, but I think it will at least start.