Unironically, they should have entirely thrown out most of their plot, and actually built up the settlement mechanics to the point that the game had dynamic factions and settlements with a simulated pseudo economy...

A dynamic, immersive, emergent FO experience, kinda like how Stalker has its dynamic, ambient faction wars, how they were trying to pull this off with the Goblins in Oblivion.

Make a series of fundamental plot points and main missions that anchor a main plot, which either happen on some world timer, or you conduct them, or even other factions/characters can do them or heavily influence them...

Now you have a game world with many more different paths to the same ending, as well as many different just possible paths for your character and the whole world... and isn't so much 'you are the unstoppable hero' as 'you are a badass, but there are lots of other badasses, and sometimes insane shit just happens for complex reasons and you gotta figure it out.'