Because this isn't a FPS?

And? RPGs have had location based damage for a long time.

As a hardcoe feature.

You don't do finishing moves mid-combat, only at the end of it.

i have to change my opinion. as an experiment i cheated my fallout NV character up to a fairly good melee character with 75 skill. its hard to say for sure since no battle is excactly the same but i seemed to do more damage by aiming for the heads of nightstalkers and gobots. if its implemented right i think you could actually do locational damage in real time combat in skyrim for melee.

How is the end of combat calculated? Your delicate sneak based assassin could be in a tavern on an assassination contract (no hostile NPCs), find your target alone in a corridor and take your opportunity to strike.

Then watch your character doing an amazing 5 second cutscene to kill the NPC

During the cutscene, at second number two, a Nord warrior walks into the corridor, yells murder murder and not only do you get a fine, but also during second number 4 you get smacked down to a quarter health.

Not to mention that you could use command humanoid on an NPC and then do a finishing move on his friend - combat has ended because there are no longer any hostile NPCs in the vicinity. Then command humanoid wears off and you watch your character being helpless attacked for a good 10 seconds or so.

Hopefully I'm just being overly pessimistic.

Only the dragon finishing move has been 5 seconds long, I highly doubt the dagger assassination move will be even 3 seconds long, probably 1 or 2 seconds. And yes you are pessimistic, very so and also exaggerating the length of the finishing moves and making up your own rules of when it actually is applied, we don't know that yet. Heck, command humanoid might not even be in the game for all we know!

An attack from behind or from the side would be more damaging than an attack from the front with melee?

Arrows is a different ball game... wouldnt arrows bounce off armor on direct hits if the armor was strong enough?

Even 1 second is much longer than the normal dagger swing, and is more than enough time for an AI entity to detect the player in the close quarters of a building. Even if it comes out of the animation before the control lock is over so you don't die, you still got detected, which amounts to pretty much the same thing.

Hardly making rules up for when it actually is applied. We know that it is applied at the end of combat. If the end of combat is when there are no AI entities in the same cell as us we'll hardly ever see finishing moves used at all. I was actually applying what BETHESDA's rules for starting and stopping combat music appear to be, which we do know from past experience. Look at the finishing moves in the announcement trailer. The dagger one is performed in an area with no hostile NPCs, and there were lots of execution finishing moves with a dagger, even those performed on an unsuspecting enemy, in Assassin's Creed Brotherhood that were long enough for the AI to detect you, turn around and draw their weapon. The Bethesda Softwork AI is a lot more aggressive than the Ubisoft - for the same scenario in Brotherhood with gamesas AI, you would regain controls at the same time that the character was attacking you, too late for you to do anything.

There are 85 magical effects confirmed for Skyrim and 82 in Oblivion. It is more unreasonable to assume that the command magical effect is not in the game because it doesn't agree with your argument than that it has been cut, especially as the school of illusion is not the school that was removed.

I hope the critical damage meters from fallout 3 are in at least.
Leg critical = slow movement

arm critical = slow and inaccurate melee, magic and archery

Body critical = lose health faster

Head critical = blurred vision