I've been laying points into agility a lot, but I totally forgot if that even helps? now I can't find anything saying what governs bow damage, so I'll have to assume that it's actually strength. Is that right?

I'm pretty sure it's just the bow itself. I don't think you get any strength bonus to damage like you do for melee weapons.

You do, however, seem to have better odds of getting a backstab with a bow, at least in my experience-- probably because the distance shots can easily catch the monster before it's even in range to check against your stealth skill. When I've used a bow, my backstab has gone up pretty quickly.