Technically, this game deserves a 5, no more! I will write it a 7 though for one single reason.
Environments have changed a lot and look much more like Morrowind now but overall it is the same easy and repetitive game. None of the new enemies pose any threat but they manage to be extremely annoying again since being level-sensitive, their HP are so maxed out with me being level 40, that it takes an eternity to bring even one Grummite Deathbringer down. A fight with three of those is a nightmare, because they can't really kill you, but you have to spend a good 10 minutes real time hacking at them.
On the contrary, the final boss somehow manages not to benefit so much from the level-based system and it fell with 5 swings of my sword. Add to this that it looks like an overgrown Knight of Order and really being easier than just one of the abovementioned Grummites and you have yet another HUUUUGE disappointment from Oblivion. Was this supposed to be the fearsome Jiggulag that wipes out the whole realm?!?!
Dungeons hold random treasures again which will never be up to what you already have from Oblivion. There is no better light armour than the Morat Tong leathers, no better sword than Umbra, no better jewelry than the Ring of Perfection and the Necklace of Swords. Pity...
Some of the secondary quests are simply insane! OK, I know this is supposed to be the realm of the madgod, but do they really expect someone to spend days in search for 100 calipers and tongs?!?!? This is not fun. Or the Museum of Oddities quest which, while being fun, is totally impossible to finish even with a walkthrough due to the fact that 2/3 of the items required a randomly generated with such a low chance to be spawned that one has to revisit all the dungeons in the realm countless times in order to get all. Or exploit the game mechanics and save in front of a dungeon and enter it then load until one gets at least one of the rear items, then go to another dungeon and repeat the process. Again not fun.
The only bearable and kind of fun secondary quest which involves seeking many items is Mirili's research quest, however, it is so bugged in many ways that again finishing it properly is impossible IMO.
And speaking of bugs, Shivering Isles manages to introduce a lot of irritating pests to the rather polished Oblivion. I experienced random crashes and people in the world were dying or simply vanishing without any interference on my or anyone's behalf. Most of the bugs are just an annoyance but I hear there are even some campaign stopping ones. Thank God I didn't experience those.
With all that said, it is easy to see how this game deserves no more than a 5. What really manages to singlehandedly save the title is Sheogorath himself! His main quest is much more intriguing than the one from the original Oblivion. The old man is incredibly charming and pretty much all of his lines are instant classics which made me laugh aloud many times.
To many this would not be enough to justify a 2-points rise, but for me this really was the difference between being totally bored by the game and enjoying it at least one bit.
Yet again, Shivering Isles might be one incredible experience I guess, if one skips even the Imperial City at level one and dives straight in the realm of madness. I suspect though, that this might ruin even more the experience from the blunt original Oblivion.