A town in eastern Cyrodiil whose population has been recently swelled by Dunmer immigrants, due to its close proximity to unstable Morrowind. It's likely that refugees trying to escape the front line of the war would have ended up in Cheydinhal too. The population will probably be something like 45% Dunmer, 35% Imperial, 20% other.
Cheydinhal can serve as a stark contrast to Windhelm, embracing it's immagrants to make an enthusiastic and vibrant workforce. The Count or Countess should be a Dunmer that welcomes more immigrants.
There's no way such a considerable population boom would fit on the old part of the city, to there will almost certainly be districts to the city. The extra districts will probably be connected to the castle, which at this point would probably be surrounded by the city districts.
Assuming that the city is split into 4 quarters with the castle in the middle:
The Old quarter would be the southern district. This is the old town area from Oblivion. The increasing wealth of Cheydinhal would probbly have made this district quite decadent, with some taller grander buildings mixed in with the old ones. This district would probably still have park-like areas.
The western quarter would probably have a heavily fortified western wall. This quarter would probably be the oldest of the new quarters and be fully enclosed be stone walls. This area will probably have more military buildings and a grand hall for the knights of the thorn.
The northern and eastern quarters may have palisade walls instead of stone. Perhaps that stone walls could be under construction? The buildings would be more like slums than in other areas, and the eastern quarter would probably have the most buildings influenced by Morrowind.