I can't seem to get close enough to people to backstab. Periodically it will work out but I'm trying to be a straight assassin type character but am stuck using my bow to avoid pulling multiple NPCs into combat.

I'm wearing leather (light).
Using daggers.
I have 2/5 so far into stealth, so like 35% and also the muffled perk.

I know I need to get farther into the tree but any help on getting better at this?

Thief armor/Nightinggale armor has sneak boosts I believe. Other than that, keep doing sneak attacks with the bow until you get enough in the sneak skill.

Also dont try and approach in the day time or in the light, you will be seen

Get behind them, move slowly until you get the run/walk perk in sneak. It's all based on your sneak skill, really. You also will have greater success doing a 1h power attack than the dual wield one in terms of not getting detected when swinging.