Well, this issue is subtle perhaps, but it would have made a more satisfying experience in my opinion.
*** Suggestion: define damage reduction by armor as:
[damage] / ([damage] + [armor])
as opposed to the current rate of ([armor]+[hidden armor])*0.012
The difference?
1. heavy vs light armor would always make a difference. (Otherwise, in the beginning of the game, for example, best heavy vs light armor only brings a few percentage points of difference in damage reduction.)
2. There would be no such thing as an armor cap. The better, heavier armors would always provide a (slightly) larger damage reduction. Armor would be more than a simple aesthetic choice.
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Similarly, make elemental reduction a similar armor-like system:
e.g. for fire damage:
reduction rate = [fire damage] / ( [fire damage] + [fire resistance])
==> You never reach a cap; and a minute resistance in the beginning does actually make a difference.
Naturally, all this would require a re-balancing that cannot be done short of a massive mod or TESVI...