Yes, waiting restores Magicka/Health/Fatigue. Sleep is used for leveling only. I believe you slowly regain health when running around but not while running around while being attacked. Same as in World of Warcraft. You don't regain health in combat, but you do when you're not.
Here's a little something i learned while breaking out of jail. I talked to the guy who prayed to the night mother and just to piss him off i pickpocketed him knowing the legion took everything from him. And after about 20 seconds of repeatedly pressing ABABABAB my sneak skill went up. So i used this trick to go from a level 31 sneak skill to a level 63 in 6 min. flat ( i timed myself) This is like the minor detect life thing for thiefs. Oh and afterwards i slept in my cell and gained a level 5 TIMES! 3>8!!!
