While OpenTESArena is still a work in progress to bring The Elder Scrolls: Arena up to modern standards, it's looking even better with the 0.17.0 update.
According to the developer the current status is: "Player movement is nearly feature-complete - currently you can jump, climb out of chasms, and swim, but stairsteps are unsolved. Enemies can be killed but their AI is not yet implemented. Items in containers can be picked up and found in the player's inventory but cannot be equipped yet. All world map locations are implemented and the player can fast travel to them. Citizens wander around and have their names generated but conversations are not yet implemented. Character creation is mostly implemented except for class generation questions". You can see the current roadmap for what's planned across the next few releases.

Direct Link
For this release here's some of what's new:
- Vulkan renderer:
- Must enable manually in options menu by setting Graphics API to Vulkan.
- Mesh combining.
- Changed forward lighting to tiled forward.
- Added classic heavy fog effect.
- Added floating origin to reduce Z-fighting and shimmering.
- Added tavern patron dialogue.
- Increased physics updates per frame to reduce bumpy feeling when moving.
- Added baseline .OBJ file format support, used with voxels.
- Added inverted mouselook option.
- Added Enable Validation Layers option (must have Vulkan validation layers installed).
- Improved frame pacing.
- Improved high DPI support.
- Reduced sky mesh vertices.
- Slightly reduced player and citizen move speed.
- Updated SDL to 2.0.12.
You need the original files from The Elder Scrolls: Arena to work with it which you can find on GOG.com.