What I propose is a joint effort to break the cycle and improve hand to hand from the get go! My plan is to start with small improvements to hand to hand that can be implemented quickly, with greater improvements down the road.
Small things to be done quickly=
1. Add the ability for hand to hand damage to scale
2. perhaps tie hand to hand to train a different skill (such as Galerions unarmored acrobatics training acrobatics when hit)
3. Add an "Unarmored effect" (perhaps a speed increase/etc. when unarmored, that raises with level?, not armor though, the monk must dodge or use a magic shield)
4. Perhaps tie unarmored to a skill
Big things=
1. Add new hand to hand animations (most noteably kicks)
2. Tie hand to hand to the magic system in some way (Vanus Galerion style!)
3. Add a BLOCK animation for hand to hand (left trigger punches, not blocks)
4. Add some sort of glove enchantability to enhance hand to hand
5. Add some sort of poison ability to hand to hand
REALLY big things=
1. Hand to hand finishing moves
2. Special Unarmed "monk" NPCs (these guys will be tough!)
3. Hand to Hand Perk tree
4. Unarmored Perk tree
I WISH I was as skilled at scripts and animations as many of the modders here, but sadly I am not. I can do some grunt work with these changes (time consuming CS tweaks) but the actual scripting and most especially animations are beyond my skill. I think this would be an amazing feat to add to Skyrim, and would really enhance the gameplay. Great unarmed and unarmored games simply dont exist, neither books (as most DnD books for instance feature meele fighters/mages and not monks). The monk is an amazing and facinating class added to DnD, and Vanus galerion is the TES counterpart. Lets make Vanus proud, and bring his power back into the TES universe! =)