Well, I agree mostly with what you propose, but obviously we shouldn't look "in game" so to speak for our information. As Frin says if Solitude only had a population of 75 people then why in earth would it be the capital of a province? The first aspect which we must consider is: Who will take over from the emperor after he was killed by either the Dragonborn or a random Dark Brotherhood assassin. Did he have any children? This is unknown but considering his age I think he most likely would have produced offspring ( if he were thinking ahead that far ).
If that was the case, the heir would be inexperienced and without many advisors due to the pull of resources from the war. He would also most likely flaunt his wealth without care because of this and may make some ill-advised decisions for his people.
This could then lead to the Empire becoming extremely weak and crumpling before the Aldmeri Dominion.
However, if the Dragonborn were to help the Empire, there could be the possibility that he would be crowned as Emperor, which, could lead to a more prosperous future for the entirety of Tamriel. Since he/she could continue the Dovahsos-line.
Anyway, the Empire right now is in shambles, Skyrim even more so, and will continue to be until something drastic is done.