I would actually like morality and possibly even culture to come into being via the sovereigns actions afterall he/she is the rolemodel for the rest of the kingdom/empire and His or Her's decisions will be told of in stories for centuries to come.
Besides we do need a way to have special dynamics like morality and culture take a role as i love their affects on diplomacy magic etc. and the darker and lighter arts should both have special spells for diff alignments as a good mage practicing dark magic may discover new spells the same is true viceversa.
And yes Multiple outcomes for quests would be awesome.