For the most part, if you decide to ignore the main quest all together, the only fighting you have to do is in the tutorial, as violence is forced upon you during it. Once you get throught the tutorial though, you can avoid fighting, though exploring ruins and such would be difficult as they are often inhabited by aggressive creatures. It would be a bit of a challenge to avoid all chances of getting into fights with creatures, I'm not sure that there's any calming spells that work on creatures, I haven't really used those kind of spells with my characters.
To answer your other question, if you do die, you must load from your previous savepoint. You can save anytime during the game, if you're entering buildings from time to time the game will autosave, othertimes you can use the quicksave option which is F9 if I remember correctly. Then there's a save option from the main menu which can be accessed by pressing Esc while playing. So make sure to save often if you're planning on avoiding fights, because you'll definately need to reload often.
You won't be able to do man quests, as the more often than not, require defeating monsters and stuff, though I guess you could run through Oblivion while having creatures chase after you in some sort of hellish gauntlet.
Hope that helps
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