I've got 70 strength and endurance, and am using a heavy weapon. Someone with a light weapon blocks my blows, I go staggering. I block with my steel shield, I often end up staggering. From the same light weapon.

...Can someone explain this?

They've got a dagger; I've got a longsword.

Your chance to stagger is determined by your http://www.uesp.net/wiki/Oblivion:Agility

...Solely?

...Well, once again the Elder Scrolls refrain: "That's why we have mods." :/

I dunno; wasn't quite satisfied with any of the combat mods I looked at; but maybe time to take another look.

I guess, also, if the games were less broken, they'd be harder to mod, because there'd be less time put into modding tools and support.

I'm not sure agility makes that much a difference -- I sure don't notice a reduction in stagger in a character with 120 agility over a character with 50 agility, with the same skills and armor.

on a similar note, I never understood how npcs and creatures could attack much faster when they stagger me, they could get in four hits with slow weapons before I recover, yet when the roles are reversed I could only get in 2 hits with a fast weapon before they recover.

That's not the worst of it. Agility is not improved by fighting but by sneaking, lockpicking and archery. None of which have anything to do with taking a hit and very little to do with agility. Of course, it's also effected by the PC console command line.