Honestly, iron axes just don't hurt very much. Especially now that axes are blunt.
I also don't like crazy power curves - System Shock got it about right. But after a year there was a mod that somewhat fixed the Morrowind level system, so don't put your money into long-term investments yet. It's starting to sound like I'll have to wait until somebody de-leveled-lists all of the levelled lists, too, which is a lot of work. Problem with mods is that you're all fat and happy, thinking, "So much work went into this mod, it'll be great! New enemies like Giants and Dragons, how fun!" when suddenly a naked nymph starts killing your level-7 character, resists all your spells, and moves around at the speed of light evading your arrows like Neo in the Matrix. And you realize that a sufficiently complex mod needs to be modded itself, and then the whole house of cards collapses.
But seriously, I think the patient can be saved