I don't really know about Oblivion. It seems like the kind of game you'd have to spend a lot of time on, though I heard Fallout 3 is similar. I've more experience playing jrpgs rather than western ones, though I don't really care about where the game comes from as long as it's got both a pretty good/fun battle system and story.
Yeah Oblivion you clock a lot of time simply exploring dungeons, doing side quests (there's a SHITLOAD), and so on. Fallout 3 is a good game, but its less playtime. Not as many quests to complete. If you look at the achievements for the game, there's all these achievements for completing quests...and that's it. Those achievements count up all the quests (except for maybe 1 or 2 very tiny things) and even though quests aren't long sometimes.
If you would get Oblivion or Fallout 3, I'd suggest Oblivion. Or go back and pick up the GOTY edition of Morrowind for original Xbox (it still plays on 360 I believe). Or you could get both, whatever!
As far as jRPG then go with like Mass Effect I guess? It's a pretty good game and I've played it quite a few times over! It depends on what kind of person you are, if you'll get bored with it or not. But Mass Effect is the only "jRPG" I have, aside from Lost Odyssey which you have.