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tldr
This should be the best non-blurry font so far for the vanilla Morrowind. I took Pelagiad font from OpenMW's font mod (https://www.nexusmods.com/morrowind/mods/46854), and build it using Oblivion Font Generator.
Font generation screenshots and examples are attached.
Supports Cyrillic symbols.
Works with Live book editing mod.
For OpenMW: use https://www.nexusmods.com/morrowind/mods/46854 instead. My mod is only for vanilla.