Yeah, the Agility thing is huge - I'd check that first before you do anything else. If it's like 30-40, you're basically fighting with your eyes closed no matter what weapon you pick.
But real talk, the bow suggestion is solid and I'd actually lean harder into it. Ranged just works better early on because you're not fighting the RNG as much, and honestly? Morrowind's bow combat is way more satisfying than Skyrim's once you get the hang of it. You can actually kite stuff instead of just standing there praying your sword connects. Grab some cheap iron or steel arrows from the Silt Strider guy in Balmora and just... hunt things for a bit. Mudcrabs, rats, whatever. Your Marksman skill will climb fast and you'll actually feel like you're improving.
The alchemy thing the other poster mentioned - don't sleep on it. You can make potions that heal you for like 5 gold each if you know what you're doing with the ingredients around Seyda Neen. Healing potion spam is genuinely how a lot of people survive early Morrowind without breaking the game. It's not elegant but it works.
If you really want to stick with the sword though, you need to either accept that you're going to miss a ton until your skill gets higher, or reroll with your combat skill as a major/specialization so it starts at like 25-30 instead of 5. The early game is specifically designed to punish you if you don't plan around the skill system. Skyrim lets you just equip a weapon and figure it out; Morrowind absolutely does not.