Well, how MMO's work is that all the game files are on and run my your machine, PC/Console whatever.
You cannot change or alter any of the server side files and such, and for good reason. (Exploits, Hacking, etc.)
So yes, Any Mod that you install, additional files are only kept on your personal machine so the Mod is exclusive to you, of course.
Fun fact: The only thing you actually download while playing an MMO is the little messages telling your pc what's happening, for example. NPC 120 is moving to X Y coordinates. That short of thing.
No texture files, no meshes, none of that.
But yeah basically, all mods only effect your game files.
Making Mods for an Online MMO is always complicated, not because it is hard to do but because the only thing you can really change without add some kind of unfair disadvantage is changes to the UI itself.
You could never see Modded armors and such in an MMO, Modded Tattoo's, Hair styles, piercings and other cosmetic things are a different story they wouldn't of course add any real advantage or dis advantage to a player other then a unique look. But then again that would require allow people access to the mesh files and all that. Also YOU and others with the same mod would even see it. Which would be fine.
I almost forgot how many absolutely ridiculous mods are out there for Skyrim.
Among my favourite mods to check out were the Modded houses/ homes / Castles and mods that added new craftable items and armor to the game.
Of course only the balanced stuff, or if the mod would allow you to craft a stupidly over powered weapon I would just refuse to use it.
Hmn.... I wonder what with Elder scrolls online out and all the new armors in that game if we're going to see Mods places the new ESO armor styles into Skyrim.
+ 50% of all damage death to you, both magical and physical is re posited back to the attacking enemy
+ Gain the passive "Looking fabulous" Looking Fabulous always you to sway all NPC's to hand over any gold in their inventory