Does your appearance change based on your morality?

Yep. Renegade sheps will see the same trademark fire red facial scars and red eyes.

Random screenshot:

However, the scars and glowing eyes are based on your current, ME3 alignment. Since even a full renegade bar from ME2 only amounts to a token chunk of Renegade points, Shepard will always have minimal scarring at the start when imported, regardless of whether you upgraded the Med Lab in the previous installment.

Consider it a result of the 'low stress environment' that is an Alliance brig awaiting court martial.

A message soon after you start the game appears when you are upgrading you and your squads powers. This message states that (assuming you are going renegade) if you continue to be harsh and cause stress, the scars derived from your implants will start up again.