Mods of the era largely fixed the scaling and the modern day best practices largely are based on that. Mortismal did a good video on Oblivion last year-ish where they talked about it but it mostly boils down to:

Just stop leveling in (if memory serves) the mid-late 20s. That more or less is what you will get with 60-70% of your levels coming from combat skills and is around where your DPS levels out. The mods of the time basically just tweak the leveled lists to plateau out similarly.

There was other more stylistic choices (stopping bandits from getting full daedric and glass gear) but that prevented the very common problem of "I didn't optimize my build and now I can't clear oblivion gates"

[–] Initiateofthevoid@lemmy.dbzer0.com 1 points 13 hours ago

I just eventually got comfortable moving the difficulty slider whenever I needed. Any other game it feels like cheating, in OG Oblivion it felt required to not drive myself insane minmaxing