With the new 1.9 patch, you have the option to go 'Prestige' with your 100 level skills. You can reset them to level 15, get your perks back, and the skill is now marked 'Legendary'. This feature allows infinite perks and no level cap.

But what I'd like to know before I myself update to 1.9: does your damage output for e.g. 'one-handed' reset to the damage output when you started the game, or will it stay the same as it was on level 100, effectively making it possible to get a legendary damage output for your troubles?

I could ask the same for the other skills, such as 'light armor': will the armor rating reset along with its level, or will it stay as it was with level 100, allowing to increase armor rating even further?

The reason I ask is that I saw that Legendary difficulty puts damage dealt at 0.25x and damage taken 3.0x, compared to what I have now with Master (damage dealt is 0.5x, damage taken is 2.0x). This effectively makes the game 300% more difficult than Master. So if damage output or armor rating goes back to the original value too, that would make the game impossible, while allowing better output would give the game a perfect balance for me! (I find Master slightly too easy, but a 300% difficulty increase would tip the balance over and make the game impossible).

reset to both armor and damage.

.25x and 3x mults aren't that bad anyways.
there are plenty of mods that do worse.