Who says it has to be in the past to feature the Dwemer? By some theories, what happened to them (or they did to themselves, or whatever) is the same thing that happened to Alduin. He came back. Who's to say they can't?
As for location, despite them doing it in ESO, I'm hoping for Summerset and the other islands around there, possibly even to
http://en.uesp.net/wiki/Lore:Pyandonea as well, as that could be interesting. The main problem for such though would be how to structure the game for the
possibility of naval combat without turning it into "The Elder Scrolls: Sea of Thieves" or the like, as IMO it wouldn't be an Elder Scrolls game then.
Speaking of such though, wouldn't it be awesome to HAVE such a game in the ES universe? That could be cool. Just not TES 6 is all.