Smart Swing System
In Arena, the player could control the direction of their weapon swing based on how they moved the mouse on the screen. In Morrowind and Oblivion, movement of the mouse was important for head movement/player direction and was not used to control the direction of the weapon's attack, leading to random and sometimes unwanted attacks (e.g. wide horizontal side slashes that could hit nearby allies).
In order to provide the player with more control of their weapon, an improved combat system could first identify which enemy the player is targeting (the closest enemy within melee attack distance with enemy center point closest to the center cursor).
Once the targeted enemy is determined, the center cursor's position relative to this enemy would determine swing type (see avatar picture).
For swords, pressing the attack button in bounding box:
1 = upper left to downward right chop
2 = downward vertical chop
3 = upper right to downward left chop
4 = left to right horizontal slash
5 = forward stab
6 = right to left horizontal slash
7 = downward left to upper right slash
8 = rising vertial slash
9 = downward right to upper left slash
Bounding box regions could be changed based on weapon type and enemy size as necessary.
Furthermore, this system could allow a combo system based on player skill. For example, if the player initiates a right to left slash by pressing the attack button while the cursor is maintained in the invisible bounding box 6, the player could not attack again until the weapon's full swing animation was complete (both outward swing and retraction of weapon back to ready position on the right hand side). However, if the player were to initiate the right to left swing (cursor in box 6) and move the cursor to bounding box 4 during the swing, pressing the attack button again after the completion of the swing but BEFORE the retraction of the weapon to the right hand side could allow the player to initiate a left to right slash. Downward and upward weapon swings could also be linked together for a variety of different fast attack combinations.
The Smart Swing System could be used in first person view mode. If the player was in third person view, a Mount and Blade-like combat system could be used.
In addition to the Smart Swing System, enemies could have critical regions that cause extra damage/special combat advantages if struck. For example, stabbing (cursor in bounding box 5) an unarmored human in the heart could cause extra damage and damage over time (with a nice blood spray). Completely horizontal slashes (cursor in bounding box 4 or 6) that crosses the neck region could cause decapitations.
Some weapons may even provide unique critical attack regions. Daggers could stab the eyes or spine, providing extra incentive to use the low range, low normal attack damage weapon.
Other melee combat features such as slow motion and special attack moves could be layered on top of this system for further depth in melee combat. That being said, I would recommend that the player almost always have movement control during execution of special melee attacks. Forcing the player to run X number of steps in a charge attack can easily cause the player to run past the enemy and attack air which is very frustrating and thus prevents the player from even using these types of special attacks.