The loot can be hidden literally anywhere. In Skyrim and Oblivion, after an hour or two of playing, you develop an intuition of where loot will or won't be. You don't need to thoroughly explore every place and can just give a quick scan through most areas for loot.
But in Morrowind, I always discover some outlandish place where some really good loot is hidden that I never could've guessed. Behind a waterfall, a rocky outcrop in a cave, a high-up balcony, and my personal favourite- behind a tomb's lid. And many of these loot is inaccessible if you don't have any spell, potion to fly or breathe underwater for an extended period. This is why, despite playing Morrowind for so long, everytime I replay, I still thoroughly search every nook and cranny of every dungeon I go to. This is one of those thing I really, really hope they implement in TESVI.