I have no idea when this meeting took place. Sometime in April, maybe. I'll start with Gnomey's part of the summary.

At the start of the meeting we discussed a variety of fairly minor topics:

First of all, I brought up the idea of the Hlaalu embedding glass shards in their foreheads, as in the by now oft-linked reddit thread.
Before my concern was that that could make House Hlaalu's nobles look too alien and unrelatable, but then I remembered that Dunmer fashion sense is strange in the first place, and if properly incorporated the shard might not look too out of place. (I've since managed to photoshop a quick example of what I mean). To most players it would just be an odd cosmetic feature shared by many -- though how many is another question -- Hlaalu nobles. Inquisitive players would probably be able to get the full story.

The issue then came up of Hlaalu faith, and the House's relations with the Temple, but we didn't really go into the subject too deeply. In the current document, the Hlaalu respect the Tribunal, but the Tribunal do not really figure in to the activities of the House in any way. The problem may exist on both ends; we could be portraying House Hlaalu as too secular, making it seem unnatural for them to concern themselves with the Temple and Tribunal faith, and at the same time we may be making the Temple too dogmatic, which makes it seem unnatural for a House that tries to forge its own path like House Hlaalu to follow its lead. In reality, suppression of dissidents and heretics aside, the Temple does not necessarily demand much of its adherents. That's House Indoril's job. In the same vein, House Hlaalu's mercantile and conspiratory pursuits do not necessarily preclude a certain reverence among its members towards the Tribunal faith.
Another question is whether House Hlaalu should have any special regard for Veloth, and if so what the nature of that regard should be.

We shortly discussed Kragenmoor, and what role it would play in-game. It is relatively far from Teyn and Seyda Neen, where the player would start the game, and as such it wouldn't be a starting city, as such. The player should also not necessarily be directed there, as the player would be to Balmora and -- possibly -- Andothren. It may also not play much of a role in the Hlaalu mainquest, though that remains to be seen. As the city is relatively far from the game starting area, and is next to both mountains and ashlands, one would expect its surroundings to be fairly dangerous.
On the other hand, it is supposed to be very outlander-friendly; the first stop of many outlanders visiting Morrowind. It would not make much sense for its surroundings to be too hostile. The settlement space itself would naturally be safe, though its merchants could be somewhat more high-end and expensive both to reflect the city's flourishing trade and for pacing reasons. The exterior outside should also probably not be too dangerous, even for new players, at least on the Othreleth Woods side. (The Armun Ashlands can be more dangerous, as most outlanders would go around it rather than go through it anyway). Rather, the difficulty of the region (which should probably be moderate rather than hard) can probably best be explored in dungeons as opposed to in the exterior.

Another question that came up was the niche Hlaalu fills, as opposed to the other Houses. As it stands, the House is Morrowind's gate, while House Redoran is Morrowind's wall. However, Morrowind generally appears to be very isolated and self-sufficient, so does it really need a gate?
One explanation would be that, pre-Armistice, the Khajiit slave-trade would have had great importance. While it was then outlawed with the Armistice, the Armistice at the same time assured greater trade relations between Morrowind and the other provinces. Another would be that House Hlaalu also keeps an eye on what is going on beyond Morrowind's walls, which allows both it and Morrowind as a whole to recognize the way the wind is blowing and react accordingly. An ability House Indoril notably lacks.
To a large extent, though, it is likely that House Hlaalu got the short end of the stick and, while recognized as necessary, its dealing with outlanders would have been looked down upon, making it the least of the Great Houses. House Hlaalu simply made the most of its lot, culminating in the perceived betrayal that lead to the Armistice which started House Hlaalu's rise to the top.

A few other minor points:
-Hlaalu is both the name of a Great House formed through the confederation of several Houses as well as the name of the most important of those Houses. House Indoril, by contrast, is the name of a major House which absorbed various other Houses and important figures and such to become a monolithic whole.
-the term castle-estate should probably not be used in-game. It's a development term. Chapel of the Garden or simply palace, or some variant of those, would work better in-game.
-As far as the question of Mournhold/Almalexia is concerned, another way we could handle things would be for the Dunmer to refer to the city as 'Almalexia' and 'the Mourning Hold', and Imperials picked up on the latter and have taken to calling the city 'Mournhold'. That usage may then have spread. The city is, as such, called Almalexia, but could often be referred to as either 'the Mourning Hold' or 'Mournhold' in dialogue.

Here's where I took over. Some of this might overlap with what Gnomey wrote.

Near the start of the meeting, there was a sentiment shared that the Hlaalu are too secular and the Temple too control freakish. Neither should be the case. The Tribunal themselves are known to play loosely with the rules and bend them to suit their interests, which fits the Hlaalu. Individual members can have more faithful and spiritual aspects to their characters, though obviously the House as a whole can’t be unified on religion, due to a large cultural mix that includes outlanders and former Ashlanders.

Before it became a Great House, the Hlaalu were a collection of influential merchant families living in Morrowind’s south, of which the Hlaalu family was the most important. The House formed when these families came together — not from one central family absorbing them as was the case with the Indoril. By banding together, they were able to maintain their coveted independence from the Indoril, who in part didn’t see these families as worthy or noteworthy enough to take over directly, since the Hlaalu didn’t become part of the Tribunal Project quickly enough, and lived in a backwoods corner of the nation at the time.

After the Battle of Red Mountain, the proto-Hlaalu houses assisted with rebuilding the province by trading with outlanders for goods the Dunmer needed after years of war. As merchants, it made sense that they could help Morrowind’s economy stabilize. The Indoril still took the credit for the nation’s recovery, of course, and for the longest time the Hlaalu had the shortest end of the stick, so to speak. They took on a job no other Dunmer wanted -- interacting with foreigners and keeping an eye on the outside world. They were in the position to do it, and as opportunists, they could take advantage of international resources. During the First Era and Second Era, this included trading for Khajiit slaves, who weren’t considered citizens or people of the empire at the time.

Like the Redoran, the Hlaalu created their own identity as a Great House to maintain their independence and avoid being swallowed up by House Indoril, who the Hlaalu disagree with on several points. The Indoril think they’re putting the Temple’s vision for Morrowind into action and the Hlaalu don’t agree. The Hlaalu basically want to escape the current hierarchy that has the Indoril on top, believing it’s harmful for the Dunmer and leading them in a mistaken direction. They see it as too limiting. Their brand of selfish entrepreneurship can’t flourish under the Indoril’s self-righteous rigidity. In a sense, the Hlaalu believe there should be no hierarchy other than having the Tribunal on top and then the Dunmer people beneath them.

While the Indoril were establishing Morrowind’s current hierarchy, the Hlaalu built up from the rubble in their corner of the land and then sought the face of Veloth to legitimatize their position. Their ideal vision for the Dunmer is one that adheres closer to the original reason Veloth led his exodus in the first place -- to exchange the unchanging order of the Altmer for the chaotic influence of the Daedra. The Hlaalu follow Veloth’s example in the sense that they see the need to change, (whether they truly believe in his message or just use it as a cover depends on who you talk to) and invest themselves in plotting.

The Indoril’s weakens was that they didn’t look outward. Even Vivec saw how much of a threat the Cyrodiilic Empire was from the wars with Reman centuries ago, and thus he was more careful when Tiber Septim came along. The Hlaalu were willing to work with the Imperials, so long as it was too their advantage. If needed, they’re willing to abandon the Empire, though a few members might have more sympathies for its ideals. Ultimately, if working with the Empire makes the House rich, then it makes sense to follow it – for now. At the same time, the higher echelons of the House leadership are preparing for the Septim dynasty’s fall, which they see as inevitable.

“As Morrowind's interface with outlanders, the Hlaalu became skilled in just the skills that the conspiracy required: risk assessment, deceitfulness, foresight and diplomacy. They were keenest observers as Dagoth Ur returned to Red Mountain and Tiber Septim gathered his armies on the border, and they secretly manipulated events to bring about the Armistice which maintained Morrowind's exceptional autonomy. They continue to prepare for the future seeing that the Tribunal Temple is on its way out.” — Swiftoak

Even though the Hlaalu are currently making all the right moves, they are far from infallible. House Hlaalu is not powerful enough to go against everyone, and in the post TES III history Bethesda concocted, they end up blamed for betraying the nation to foreigners. During the course of their quest line, they patch up their relationship with House Dres, but when the Dres is wrecked by the Argonian invasion and the Empire pulls back from Morrowind, the Hlaalu are left without allies. They end up over expanding and rely too much on relations with the Empire. When they ended up on their own, they weren’t able to explain how their dealings with the Empire were for the good of Morrowind, because of the secretive nature of their plot.

We don’t necessarily have to allude to this future in the Hlaalu’s quest line directly, but we should leave the possibility that it can happen open.

Andothren

Andothren is like Vvardenfell in that many different people are vying for power. The player will rise as a lackey of someone in the city and eventually become a minor House Peer. Andothren represents the external face of the Hlaalu — their outward identity as selfish, greedy merchants.

From there, the player will go over to Narsis. The Hlaalu capital will feature the most masques and intrigue during the Hlaalu questline. It’s where the conspiracy is guided by whoever is in charge, who control its current direction. It is here that the player will begin to get a sense of the Hlaalu’s larger plans.

After gaining influence on the council, the construction of the stronghold settlement at Nav Andaram will lead to the House War with the Indoril. At some point the Hlaalu will offend the Dres, and for a while it will look like the Dres will side with the Indoril. But then Hlaalu and Dres will patch things up and become allies. The dealings with the Dres should be in the background for the early part of the questline, until it suddenly becomes important later on.

The vanilla questline can be separated out as a miscellaneous questline for Hlaalu players. They can take them on if they want, but they won’t be sent explicitly to do them, unless they need more rank to continue in the main questline.

Raathim

Before Tiber Septim’s invasion, there was an Indoril chapel at Old Ebonheart — one of the most important chapels at that time. The Indoril lost the chapel following the Armistice, and the Empire coopted the local Raathim nobles as Morrowind’s ruling family, essentially making up a royal house.

Nowadays, the Raathim are essentially affiliated with the Hlaalu (because of some sort of mutually beneficial family tie), though the Great House and royal family don’t necessarily work in tandem. The current king, Helseth, has his own vision for Morrowind as an Imperial province with him in charge. He wants to give the monarchy real power and undermine Morrowind’s traditional power structure.

He is not aware of the Hlaalu conspiracy, but there likely will be opportunities to interact with him during the questline, when the house will be looking for allies. For instance, the player might end up asking him for permission to build Nav Andaram on the east bank of the Thirr, since that stronghold would require expanding into new territory (compared to House Indoril not needing permission to construct Id Vano within its borders). The Hlaalu might also want to exert influence over Helseth, like they did with the old king Llethan.

Trade

“Merchants and traders in a land that despises outsiders, the Hlaalu nevertheless maintain a limited commerce with the Empire, trading stout Imperial broadcloth and Cyrodilic brandy for the elegant trinkets produced by the admittedly skilled craftsmer of Morrowind”

Ranks

House Peers are generally just rich people with manors who are not Council Electors. There doesn’t need to be a set number for them. Gnostic Officers are essentially secret agents who are given a greater degree of independence on how they operate. The council directs plans to these officers. While the player starts working for the council directly when they gain the rank of Bonded Agent, the council will still keep many of its secrets from him or her. Bonded Agents are bossed around, but don’t really know what’s going on, while Gnostic Officers know what going on to at least some extent, and are trusted to carry out important tasks.

Council Electors

Council Elector Fethas Hlaalu (Narsis) - established family; could be a go-between with Helseth
Council Elector Ivul Hleryn (Ud Hleryn) - established family
Council Elector Llaasa Indarys (Kragenmar) - established family with Redoran branch. (House Indarys may have been a minor house in the Waters March which, much like the march itself, got partially incorporated into House Hlaalu).
Council Elector Eoli Freixaal (Kragenmar) - outlander
Council Elector Atran Oran (Oran Plantation) - upstart family? (Along with Avon Oran in Suran).
Council Elector Tholer Andas (Andothren) - family status unimportant
Council Elector Vedam Dren (Ebonheart) - established family; Duke of Vvardenfell District
Council Elector Dram Bero (Vivec) - family status unimportant
Council Elector %PCName/some outlander House Peer (Nav Andaram) - upstart; replaces Tholer Andas.

Other Important Characters

Crassius Curio (Vivec) - outlander
Yngling Half-troll (Vivec) - outlander
Velanda Omani (Ascadian Coast) - family status unimportant; probably moved there with Orvas Dren. Not sure if she needs to be a House Peer.
Nevena Ules (Suran-ish) - established family? Possibly from the family that originally controlled Suran before Oran took the position. Note that this does not automatically signify resentment of the Oran family, though it could. Not sure if she needs to be a House Peer.
(Orvas Dren (Dren Plantation) - established family; boss of the Camonna Tong)
Raynasa Rethan (Odai Plateau) - established if fairly minor family; gets Rethan manor, is possibly pawn of player.
Ralen Hlaalo (Balmora) - established family and very dead
Nolus Atrius ('Balmora'/Andothren) - outlander
Avrar Narsuaes (Othreleth Woods) - established family; the Narsuaes family generally hold at least one seat on the council, but Avrar generally tries to keep out of intrigues. He would be another candidate for Duke of Narsis District, in which case he would be an ineffectual duke whose sole purpose is keeping himself and his family out of trouble, not caring whether he actually does his job well or not.
Edayn Sadras (Shipal-sharai?) - upstart
Tharsa Omayn (Narsis) - established family
Ivasu Raran (Narsis) - a relative of Llananu Raran of Indal-ruhn, the Raran family being fairly important. Family may have gained power doing business in Seryn before moving to Narsis to (try to) take a place in Hlaalu politics.

Vvardenfell

The Hlaalu’s project to gain more control of Vvardenfell could be represented by establishing the person who takes over Rethan Manor (Raynasa Rethan) as the player’s puppet.

Nolus Atrius — a NPC mentioned in the original game who wasn’t actually present — is Balmora’s (corrupt) magistrate, and lives in Andothren.

Orvas Dren will remain the head of the Camonna Tong and won’t have a seat on the Hlaalu council. He’s still a member of House Hlaalu, though he won’t be listed as one in the Construction Set. Like in vanilla, he will have power over other councilors, both on Vvardenfell and the mainland, and will manipulate them through his wealth and networking.

Other Notes

Indoril

We want to move away from calling the homes of high-ranking Indoril “Castle Estates” in-game. They should be referred to either as so-and-so’s estate offhandedly, or as “Chapels of the Garden” as their official title.

Am Mar’s name should become just Ammar. We also settled on Sundered Scar as the Inlet Bog region’s final name.

For the Vales of Mephala (Mephalan Mountains) region, the main points of interest are the Indoril vying for power, the outlander guilds trying to establish themselves and Mephala playing with everyone. On the surface, the Indoril seem to be in control, but the area is actually much more wild and dangerous. While the Thirr River Valley and Lan Orethan show the benefits of stable Indoril governance and the Sundered Scar represents their absence, the Vales of Mephala shows the Indoril falling apart, undermining each other with their competing claims of authority.

Smuggling dens

We should place most smuggling caves with slave pens along the Inner Sea’s coast and avoid putting too many inland. It’s not illegal to transport slaves overland, so smugglers aren’t needed for that part of the slave trade.