If like say I had a low level in blades skill, would I do low damage with a conjured sword compared to if I had a high level in blades skill? Meaning does the conjured weapons damage come from said weapon type's skill level or the level of conjuration itself.

If you are low dmg blade, then you will do low dmg with a blade. But, especially early in the game, conjured blades have a higher base dmg than ones you'll find at low levels. Eventually, the weapons you find at higher levels are quite a bit more powerful than an conjured weapon.

In Morrowind it does. But that's alI know. Sorry.

Yes, but the base damage on the conjured weapons is very high. Your Blade skill determines how much damage you do with a weapon, according to the following formula:

Damage = BaseWeaponDamage * 0.5 * ( 0.75 + Strength * 0.005 ) * ( 0.2 + BladeSkill * 0.015 )

Let's compare the damage that one would do with an Iron Claymore, to the damage with a Bound Sword. The character in question will have 50 Strength, and 50 Blade.

Bound Sword: 29 * 0.5 * ( 0.75 + 50 * 0.005 ) * (0.2 + 50 * 0.015) = 29.475 (assuming this would be rounded down to 29)

Iron Claymore 12 * 0.5 * ( 0.75 + 50 * 0.005 ) * (0.2 + 50 * 0.015) = 12.475 (assuming this would be rounded down to 12)

As you can see, the Bound Sword does quite a lot more damage, despite the character's skills and attributes being the same. Hell, even at a Blade of 5 and with a Strength of 40, the Bound Sword would do 3.788125 (rounded up to 4) damage, and the Iron Claymore would do 1.5675 (rounded up to 2). While the increase isn't as large at lower levels of strength and Blade, it is still there.

Edit: For whatever reason, that math doesn't seem like it adds up. The point remains, however.

That is a good example, even if the numbers aren't spot on. I would have to look to be sure, but I think Luck plays a part in the math as well. Its like a hidden bonus, for every point of Luck it adds a % to the effects of your skills. I want to say 5 Luck is like another 1 point to all skills. If your Blade and Luck are 50. The damage you do, should be as if your Blade was 60. I don't think, the damage shown on the inventory screen, reflects the extra damage from Luck. It is applied to the effect when used. The same applies to all of your skills.

I could be wrong, ( and that is the case more often than not ) but that should be close.

EDIT : @Niflhel If you have a low Blade skill, IMO you're by far better off to enchant a weapon, than conjure one. Or make a custom spell with Conjure and ( X ) to Blade. Adding X to Blade , to get it to 100 will increase the damage of the conjured weapon. You just won't get the little perks from being a master. Like the knock back or paralyze.

This is a good point, too. You're betting off heading to the nearest marauder dungeon, picking up whatever variety of Blade will do the most damage for your level, and enchanting it with a Grand Soul Gem or Sigil Stone. The extra damage from having a high skill is far outweighed by the extra magical damage you'll be doing. Even at a low Blade Skill, a powerful enchantment can do just as much damage as a Blade master's unenchanted weapon.