1. First, quickly go over the current implementation of the region. This stage is about taking stock of what we have to work with.
1.1. What does it currently look like
Most of it is an empty heightmap. The north-western and north-eastern parts (remnants of the old implementation) are a mish mash of WG and AI parts. Some shrooms are floating in the east as part of an old test cell and assets tests are being done in the cells bordering the Armun Ashlands.
Nemon is currently working on a Kragen Mar overhaul, but this is a separate file (somewhere) and should probably be made into a claim or section file.
1.2 What is in it. (Settlements? Whose?)
Kragen Mar (a Hlaalu border city and trade hub) and a few scattered farms to the east.
2. What is the general purpose of the region? Why does it/should it exist?
2.1. What is its narrative role?
The region fills the role of profitable heartland for Great House Hlaalu and contain its core content.
It also serves as eye candy, extending the red rocks of Shipal-Shin to a new spin of Morrowind's game of mushroom environments. Parts of it, the more "forested" will be the home of pockets of other content, be it Mages Guild researchers, Argonian Liches or the like.
2.2 What is going on there? (ie. is it challenging wilderness, or does it play an important role in commerce, pilgrimage, etc.?)
All of the above: on its north-western end is a major border crossing into Cyrodiil, Veloth's path and its pilgrim accommodations begins here, and the settlements along the Kanit river constitute House Hlaalu's ancestral economic heartlands. At the same time, the deeper parts of the woods are forlorn and medium-difficulty wilderness with kooks and higher-level surprises aplenty.
3. What is the identity of the region? This stage is about establishing the general appearance of the region.
3.1. Who inhabits the region?
Hlaalu, their dependants (Veloth and (Khajiiti) slaves both) in various plantations and minor settlements, a few Ex-Redoran, Nibenese that resettled from just across the border.
Very few if any Red Swarm Militia. Monks, researchers, and other recluses can be found scattered around. A few (2?) Baluath are hiding somewhere in the north.
3.2. What are they doing there?
Most inhabitants farm. The Narusa winery would make use of the comberry farmed here and create Greef (comberry brandy) and Shein (comberry wine). A few Kwama mines (small) are being exploited near the settlements, wild ones (small) are in the deeper woods, some which might be in the process of being subsumed by the carnivorous fungus (https://www.tamriel-rebuilt.org/asset/carnivorous-fungus).
One or two (no more!) Amethyst mines are being exploited by nearby Tier VI settlements that are not on the map yet - they are explicitly not supposed to be part of a larger settlement.
Finally, the woods are actively exploited for alchemical reagents. A lot of fungi are used in various potions and harvesting and shipping them has become a small but regular industry.
The folks living in the wilderness would either prey on travellers or mind their own business.
Travellers and goods from Cyrodiil pass through here along the Kanit river and this sustains infrastructure.
3.3. Who used to inhabit the region (especially before the War of the First Council)?
Chimer and then Dunmer have been inhabiting this place for a very long time, remaining essentially unchanged in occupation. Their allegiance have switched from minor clans and houses to Redoran and then Hlaalu or just Hlaalu over time as the Great Houses consolidated.
In old days, the Kragen Clan’s holdings near Kragen Mar marked the First Dwemer Empires’ southernmost holdings. The Ayleids had a tiny outpost hidden in the region (which is technically in the Velothi Mountain region, but west of OW). If there were Nedes here thousands of years ago, then their passing has left no traces behind.
After the Armistice, foreigners started settling in the region, but not to the point where the dynamic or culture shifted.
3.4. What did they do there?
Farming, although not with the current plantation system. The cat-catchers formed a more prominent part of the economy at the time.
The Dwemer did Dwemer things as they were wont to do. The Kragen clan native to that area left west with/as part of/as the Rourken and their holdings were left halfways abandoned after the formation of the Second Empire.
3.5. How densely populated (and where) is the region?
The Othreleth Woods are settled as densely as the Ascadian Isles next to the Kanit. The Tier IV settlements should be bigger than usual and St. Seryn should be smaller than the usual Tier III settlement.
Away from the river, the fungal woods dominate the region and settlements are sparse and small due to their inhospitability.
4. What is the layout of the region? This stage is about discussing the implementation of the region in broad strokes.
4.1. How would the things within the region (dungeons, settlements) be arranged?
Most settlements and plantations are on the banks of the Kanit River that goes through the center of the region. Further from the river (especially along the western road) are small outposts for research, mines, alchemy, and the like.
Ancestral tombs and other locations dedicated to ancestor worship should be placed near Veloth’s path.
A few overgrown Daedric shrines and a Dunmer stronghold would sit around in the wilderness. A few Velothi towers in the hilly bits at the edge of the region. No Ayleid ruins. No Dwemer ruins save perhaps a few small outposts near Kragen Mar.
The more challenging dungeons and caves should be located in the woods, away from the river and the big settlements.
4.2. How do we want the player to experience the region in-game?
In essence, the Othreleth Woods should have a bit of everything: quest givers and services along the river and a lot of adventure off the beaten path, with a relatively broad variation in difficulty along that gradient.
The player should start out and spend most of their questing time in the easier settlements near the Kanit.
The rest of the region should play like an endless deadly mysterious weird mushroom forest filled with adventure, slasher movie cabins, and fungi. The forest could act at least partially like an exterior dungeon.