I would have liked to see a favorites menu in the menu (magic items etc) as well, allowing you to organise the favorites menu in game. You could put any spell/weapon in any order you wanted, and have small folders to group spells/weapons/potions, keeping the size down.
Also change the number of hot keys you can have, make the down directional button the favorite menu, and the up button another hot key. Then have LB and RB (xbox) to scroll up and down (only when in the menu itself, otherwise they will function as normal). Just an idea, I'm sure there is a way to make even more hot keys out of the controllers.
The big thing though, would being able to set a favorite for an entire outfit and weapons set, so you could hot key full steel plate armor, a necklace+ring and a steel warhammer for example, and they are all equipped when you click that favorite. Not hard to implement, but it would be so useful for me. What do you think?