The easiest way would be to stack Chameleon spells and effects (via Alchemy, enchanted items, or a custom spell), until you have a total chameleon value of 100% or more. With 100% Chameleon, you can basically do whatever you want with impunity, as nobody can see you, and unlike invisibility, Chameleon does not break when you interact with the world around you.
See also: UESP Wiki on Chameleon in Morrowind
In order to gain a level in Morrowind, you must improve your Major and Minor skills by a combined 10 levels. You can gain 1 level in each skill, or 10 levels in one skill, or any combination thereof.
Afterwards, you need to sleep (not just rest/wait, but sleep, either in a bed or in the wilderness), and you will be able to gain a level.
When gaining a level, bonuses will appear, up to +5, for your different attributes, depending on the skills you leveled up since your last level. This includes skills that are neither major nor minor skills. Therefore, increasing these other skills can be a good way to ensure you get a +5 in the stats most important to you. The bonus is defined by the attribute associated with the skill, so therefore, Luck will never get a modifier.
You pick 3 attributes to increase at levelup, so if you have bonuses on 4 or more attributes, extra bonuses will be lost.
It's also important to note that, if you gain more than 10 major/minor skills before you get a chance to sleep, the extras will carry over towards counting for your next level. You will only gain one level for each time you sleep, so if you've gained 20 or more skills, you'll need to sleep at least twice to gain all your levels.
Any attribute bonuses you've accrued go away as soon as you've gained a level, so it's generally preferable to level as soon as you get the 10th skill, or else you're liable to waste attribute bonuses you could have used otherwise.
Best Answer
There is a mod called Cool Enchanted Ambience which allows you to wear enchanted gear without reconizing it as enchanted.
Cool Enchanted Gear Ambience Mod
Appearently some people don't like enchanted armor since it sucks and no one likes glowing enchanted armor [Of course, to show that it's enchanted, it neds to glow, but people can hide it using the mod].
Another mod is called Subtle Magic Glow Mod which allows enchanted items to have a different look too
Subtle Magic Glow Mod
The look of enchanted gear now has a different look, kinda faint look.