So right now I have a Legendary Daedric Sword from Smithing and while a epic looking sword I want a unique weapon like the Dawnbreaker but its weaker then my Daedric and can only go up to Flawless, anyone found a weapon thats better then Daedric weapons on Legendary? What I loved about Morrowind and Oblivion is you could find the "normal" weapons like Steel, Glass, Daedric etc but their were unique weapons that were stronger, Yet so far in Skyrim it seems like The smithing weapons are the best.

Also anyone know why certain weapons/armor can only go up to Flawless even with 100% Smithing? Can you go over 100%?

How are we supposed to answer your question without spoilers? All I can say is yes I have found two truly unique items which had different skin and better stats than the item from the same category. It is too early for me to judge if there are too few since I have not explored enough

FIrst off, yes, you can use potions/wear items that improve your smithing skill. Secondly, at 100 Smithing, you can only improve items up to Flawless without perks. Example, without the Steel Smithing perk, you can only improve Steel items up to Flawless, but with the perk, it can go up to Legendary. I'm guessing that the Smithing perks don't apply to these certain items.