The dwarves never "disappeared", they were all cursed by a deadric prince or being (VIivec perhaps?) and transformed into mudcrabs. Evidence:

• There are no records of mudcrabs and dwemer existing at the same time Mudcrabs have been known to gather around dwemer ruins.

• The Dawnguard quest: "A New Order", tasks you with retrieving a satchel of Dwemer Gyros that Mudcrabs have stolen. This is obviously the trapped dwemer trying to gather the components needed to make a machine that can reverse the transformation and save his race.

• The creation club, a service run by Bethesda (the company that makes the elder scrolls video games), has a mod that adds a Dwarven Armored Mudcrab to the game. This is considered canon by Todd Howard himself.

The first firearms were single shot muskets, slow to reload and not very accurate. Clearly someone important died while trying to reload and their family/faction/impotent Thalmor made sure to ban them