Really, there could be no other outcome.
Well, I mean, there could be, but Grace put all her points in Persuasion and Charm magic, neither of which is effective against giant skunks.
Sidenote: I've been told Morrowind didn't have level scaling. Maybe that was the problem with its level scaling? I don't know. I just know I tried it back when it was new and was not prepared for a game that open and could not get into it. Heck, I'm not even sure if I gained a level while playing it.