It's definitely an important factor! Open world games are at their best when the player navigates the space naturally - without quest markers and the like, but

It's definitely an important factor! Open world games are at their best when the player navigates the space naturally - without quest markers and the like, but with "oh, that thing on the horizon looks cool, I'll go there!". FNV is amazing at this. The Morrowind devs definitely considered this, but they were of course limited by the hardware of their time. So the game is made to evoke this feeling even at small render distances. But if you then crank them up, you won't have one or two cool landmarks to see, but way too many! You can see this done well in Elden Ring - you can see very far, and the map is big enough to still space out points of interest. The only way to "fix" this for higher render distances is to rebuild the world with those in mind.