Bigger towns with more verticality would also be nice, Whiterun was like 12 buildings in total, but that's more of a technical issue.

Markarth is pretty darn vertical.

I don't know about the verticality.

I have an architecture book that covers early colonial era stuff in the US, and while two-story houses did appear to be common (this was apparently useful from a heat standpoint, let upstairs bedrooms stay warmer), I know that a significant factor up until the invention of steel-framed buildings was that it was expensive to add height to a building. Basically, if you wanted a taller building, you added a lot of weight to it, so you had to increase the mass of the structural elements below it, which just exacerbated the problem for anything beneath that. Also, up until the elevator came along, buildings rarely exceeded about four or five stories -- because people didn't want to do all that climbing on a regular basis. The upper floors in a block of apartments were the less-expensive, undesirable ones, the ones that required the climbing.