In the vanilla game, bound spell effects could only be applied to the caster. Now you can create spells that can include bound item effects that apply on touch or target, with or without an area of effect.

Creating Bound Spells
This mod does not add any spells. To create a touch/target bound item spell, you'll need to learn the desired spell effect, then visit a spellmaker to create a custom spell.

Using Bound Spells
Bound spells can be cast on creatures and NPCs, with some limitations. Creatures cannot use armor and casting bound armor (except shield) spells on them can cause the game to crash or other undesirable behavior. To avoid this issue, all creatures will always resist bound armor effects (except shield). Creatures that don't use weapons/shields will never wield any bound weapons/shields cast on them. The AI decides which equipment to use, based on a variety of factors.There's no guarantee that an NPC or creature will actually use the bound equipment it's been given. Like any other spell, bound spells can be reflected, resulting in the effect applying to the player instead of the intended target.

Special Rules for Summons
In the vanilla game, there are three summoned creatures that can wield weapons/shields: golden saints, dremora, and skeletons. To give the player greater control over the weapons a summon will wield, casting a bound weapon spell will remove all non-bound weapons, and a bound shield spell will remove all non-bound shields. Casting bound longbow will add an appropriate number of arrows, so that the creature can make use of the bow.

Additionally, the default skeleton summon has been replaced by a version that can wear armor, allowing it to be the target of bound armor effects. Only the skeleton summoned by the player has been updated; NPCs still summon the original creature.

Magicka Expanded
If Magicka Expanded 2.04 or later is installed, this mod will detect and update any bound item effects that it adds. Magicka Expanded is not required to use this mod.

Bound Spells Reforged
Check out Bound Spells Reforged for a significant visual upgrade to bound items and related spell effects.

Requirements:
Note: This mod uses the pre-release 2.1 branch of MWSE, currently in development.

This mod requires Morrowind Graphic Extender (MGE-XE) 0.10.1 or later and the latest nightly build of MWSE.

Installation:
Extract the archive into .\Data Files in your Morrowind installation directory.

Using this Mod:
Install MWSE 2.1 and this mod. Activate bestow_binding.esp and load up an old or new game.

Removal:
Delete the following files and folders:
.\Data Files\MWSE\mods\merz\bestow_binding
.\Data Files\Meshes\merz\bestbind
.\Data Files\Sound\merz\bestbind
.\Data Files\bestow_binding.esp

Known Issues
The new skeleton summon is not undead, so it won't be affected by Turn Undead. It's no longer a creature, so it won't be detected by vanilla Detect Animal. The impact of this is minimal as it only affects skeletons summoned by the player; NPCs still use the original summoned skeleton creature.

If you attack your summoned skeleton, it will turn hostile after a few hits. Since it's now an NPC this counts as a crime. In testing, it was difficult to do this accidentally, so it's expected this will have minimal impact.

If you summon a skeleton and change cells and the summon fails to make the transition with you, then you wait for the summon effect to expire and save before reentering the cell where you left the summon, you'll get a warning like the following when loading the save:
"Unable to find Friendly Group Clone merz_skeleton_summon in Load for REFR"
This can be safely ignored.

These issues may be resolved in a future release.

Incompatibilities & Save Game Warnings
No known conflicts. If a conflict is found, please report it on the Nexus.

After disabling this mod, don't attempt to load a save that has a player summoned skeleton active, or a summoned creature active that had bound longbow cast on it, even if the bound longbow effect has expired. Both will fail. Let the summon effects expire before saving.
Any spells created can be safely deleted in game, even after disabling the mod.

Credits

Kurpulio for the initial idea and testing help.

Mack_Of_Trades69 for the playable skeleton assets from Morrowind USkele Mod

Special thanks to all the MWSE developers past and present.