Oblivion is an excellent, absorbing, expansive game, that will enthrall any child (or adult) interested in a swords-and-sorcery type world. It won numerous Game-of-the-Year awards in 2006, and was one of the major games that caused people to upgrade their original Xbox to the Xbox 360. Although the graphics have aged a bit, it's still very pretty to look at, and the gameplay is still captivating. It should be noted that it was originally rated T, and I have the PC game box to prove it, as I've been playing it off and on since its original release. Bethesda later caved to parental pressure to change the rating to M based on the release of unauthorized, downloadable, third-party mods FOR THE PC VERSION ONLY, which let you play the game with topless females. The actual game content that you buy in the store (PC or console) is still a T-rated game!!!
There are 5 aspects to Oblivion's rating label that I'll address:
1) Blood and Gore - if your child has seen the Indiana Jones or Lord of the Rings movies, they've seen gorier stuff than this. There will be a bit of blood on your sword after a battle that soon fades away. There are cartoonish-looking corpses and zombies strewn about some dungeons (if you want more realistic ones, look to the game's sequel, Skyrim). Nothing terribly egregious.
2) Language - VERY sparse. Of the thousands of lines of spoken dialogue in the game, "h**l" and "d**n" might get used a handful of times. Oblivion is NOT Grand Theft Auto. No f-bombs, s-bombs, or G-d's. When there is any mild cursing, it's usually contextually appropriate, related to a pretty intense occurrence in the game.
3) Sexual Themes - this is pretty laughable. You can strip dead bodies down to their drab, unflattering underwear when you loot them for armor, which might elicit a giggle or two the first time your son sees it, but it quickly becomes a non-issue. There are a few sporadic instances of double-entendre (a line of dialogue or two, and a book), but if your pre-teen understands it, then you've got other problems than what's in Oblivion. It will likely sail over their heads.
4) Use of Alcohol - another laughable one. Oblivion is no more corrupting from this standpoint than a stroll through the grocery aisle. Yes, there are alcohol bottles everywhere in the game, but it just blends in with all the other useless detritus you see on shelves and tables (e.g. bowls, spoons, flower pots, etc...). One town specializes in making wine, complete with vineyards outside the town walls, but no one is seen drinking it. All the alcohol is in plain, non-descript, brown (beer, mead, ale) or purple bottles (wine), and you derive no net benefit from drinking it, so what's the point? You can't get drunk and stagger around, and other than a temporary numerical change in your stats, you won't notice any difference in your character. There is one character in the game you might meet who does slur his words and act drunk, well, because he is; but, your quest to reunite him with his long-lost twin brother results in him changing his ways and going sober. What's so bad about that?
5) Violence - okay, yeah, it's violent, but only as much as you make it. I suppose you could wander around picking flowers for hours on end and never raise an angry hand to anything or anyone if you wanted to. Even at its most violent, it's still much less violent than any first-person shooter. And there are consequences for getting out of line and attacking innocent people. My son tried becoming the town bully...once. He soon got his comeuppance from the town guard.
In short, Oblivion is pretty tame as far as mature content goes, compared to other RPG's. It's also much less dark than either its predecessor (Morrowind) or its sequel (Skyrim), and as such, is probably the most approachable of the Elder Scrolls games for kids. The warning label should really just say, "Obsessive-compulsives approach with extreme caution."