Sorry if this is an obvious question but I'm very new to this game.

Is there a way to make/improve arrows that are more powerful than ones that you find/buy, or is the increased damage gained only by a better bow? Is the only way to increase the actual arrow's damage to add poison?

No way of crafting or improving arrows via smithing, though if you're on PC there are mods that greatly expand smithing.

It seems very silly that I (with my smithing at lvl 60) can make various exquisite and flawless armors, and make improvements on magical armor/weapons, but can't manage to make myself a single arrow. sigh ...

Yea... Even if I could make arrows would be nice. I don't even have to have the ability to make them better. Just make them

Fletching would be great but to be honest I have too many arrows as it is, I'd love to be able to enchant arrows though, even if it was only one arrow per petty soul gem.

Definitely missing.

As a side note, what does an arrow's dmg rating do compared to that of your bow? Do they stack for a total dmg output?