In my opinion, demoralize is pretty useless anyhow -- don't worry though, just go sell that new enchanted sword and you'll make some cash anyway. A waste of a Sigil Stone, yes, but better than nothing.
Assuming you are a Warrior, I take it you can't access the Arcane University? By which I mean, have you gone through the mages guild quests? You don't really need good magic skills to do those quests; half of them involve combat anyway, so you should be OK -- the only problem is that one or two quests require you to have 25+ in Alteration...so buy a cheap Alteration spell (like Shield) from a Discount spell store and just spam-cast it to level up real quick.
Even if you
do get to the Arcane uni though, you'll still need high levels in the Schools of Magic to be able to make spells...so this really isn't a viable option; I only list it because I don't know your stats.
As for getting some nice magic-enhanced swords, the plains of Oblivion are a nice place to get cool swords -- the Dremora seem to use them alot, and at level 21 you should be finding magic swords every few minutes. Keep taking down the Oblivion Gates and getting those stones, as sooner or later you'll get a good one.
The http://uesp.net/ is a fantastic place to get information on spells, weapons, artificats, enemies -- you name it, it's there, for all the games in the series. From the wiki, it would appear that http://uesp.net/wiki/Oblivion:Feather actually increases your http://uesp.net/wiki/Oblivion:Encumbrance, so I don't think its a point-per-pound basis. In any case, if you
can get into the Arcane Uni, this is one of the easiest spells to make and requires a very low level of Alteration to get the highest possible. Also, it stacks, so you can cast three different versions of the same spell and get stacking abilities (read the page for Feather on the Wiki).
Also, if you're running too slow, work on getting http://uesp.net/wiki/Oblivion:Heavy_Armor up to level 75 (expert), which makes it Encumber you 50% less -- the armour weighs less and you move faster! Check out http://uesp.net/wiki/Oblivion:Heavy_Armor#Skill_Increases. If you need to increase other combat skills, check out http://uesp.net/wiki/Oblivion:Increasing_Skills#General_Combat_Strategies
Well, that's a whole lot of links and info for you to check out, so I hope it helps you!