I agree with the hampered movement, and also with the instadeath headshot. Wen you get an arrow through the skull, you don't shrug it off.
I've always had this relatively simply idea about the archery skill in Elder Scrolls which I think would make perfect sense. Don't scale the damage on the character's proficiency in the skill, but rather, scale the character's accuracy on their proficiency in the skill. Anyone can aim a crosshair with a mouse or controller. But my idea is that, the lower a character's skill in archery, the more "spread" the arrow's trajectory relative to the crosshair. This is reflected in reality. The crosshair in the game represents where the character is intending to aim for, just as an archer in reality will look and aim were they intend to hit. However, there are always physical factors that may result in a miss, which are all governed by the individual's skill in archery. Thus, a low skill should result it more inaccurate shots, so that a character might only be able to hit close targets consistently, and then their shots get more and more accurate as the skill improves with time until they have 100% accuracy on the crosshair with a maxed out skill. (The "radius of inaccuracy", or margin of error asymptotically approaches zero as the skill approaches maximum value). Make sense ?
I think this is fair enough, though I think it would have to be very carefully implemented so as not to drastically effect accuracy -- otherwise using a bow and arrow in-game would no longer be fun, just frustrating as your character occasionally misses a shot that they obviously shouldn't miss.
Also, I think an enemy shot anywhere (except the arms perhaps), not just in the leg, should be slowed down. Less so than in the leg, but the crippling pain of an arrow lodged in your abdominals will slow you down.