I don't know so much about what range constitutes "out of earshot", but I presume Muffle isn't perfect silence either. Why is invisibility supposed to be perfect, foolproof, flawless invisibility?

Because that is what it says on the box.
Im fine with being spotted if I try to do it in line of sight, thats like a real-life conjurer showing what is up his sleeve.
Im also fine with them hearing you if you dont use a muffling spell.

Im not fine with it not doing what it says on the box, with it not being invisibility.
Why be a mage if it means that you have to be an athlete (no waterwalk) an alchemist (damage boosters and cure disease) and a rogue (lockpicking and sneaking) as well?
No, magic got too much of the nerf-gun this time around even without spellmaking.

And the removal of spellmaking was the worst decision ever made for the series.

Because people had to complain about the old invisibility which wasn't actually broken or OP to begin with, and now that they changed it it is underwhelming.

What box? Where does anything say that Invisibility spells create perfect, flawless invisibility?

And it seems like every person I run into annoyed by the removal of spellmaking is just complaining that they aren't able to make themselves so powerful that the game was easy - which strikes me as rather the point of spellmaking to begin with. Get in there, tinker with the spells, and find a spell that makes it easy to just zap enemies.

Because Bethesda fails at balance.

Making something overpowered = fail
Making something overpowered worthless = fail

With an ideal balance, things would be fun and viable, but still able to be countered in some way.

Indeed, like the mechanisms I described.
Not being able to cast invisibility in line of sight was in Morrowind and Daggerfall, not sure why they allowed it in Oblivion.
But it should do what it says on the box, make you invisible.
If no-one sees you cast it and no-one can hear you because you cast a muffle spell first, then you should not have to sneak.
Otherwise its chameleon, not invisibility, and a weak chameleon at best.

This is where some sort of perception or awareness attribute would have come in really handy, with certain enemies being better able to track you while invisible and others being completely clueless even if you cast it right in front of their eyes.

I think something like this is already in the game.
Npc's use hearing and sight and I believe some NPC's have better senses than others.
Bears are hard to sneak up on, and skeevers and sabrecats manage to sneak up on me.
Falmer are blind, but hear as well as bears.
In any case, I dont have proof of this as I play on xbox, but I have noticed that some types of enemies are better at detecting you than others.

I don't think bears have great eysight anyway, their strongest sense is smell. So yeah a bear would probably smell you even if you were invisible and be able to attack you. However I doubt this was the intention with this game, most likely invisibility is just broken.

of topic but, you play on the Xbox? i was certain you where a PC player..

I dont think NPC's have a sense of smell, but I know they have hearing and sight.
Bears probably hear you, as they are very hard to sneak up on before your perked up or have a good enchantment or spell, even from behind when they are resting.

Its gone from perceived too powerful...which it wasnt...to utterly useless!

Invisibility sets off a firework when you cast it and everyone becomes super-aware of you.

Seeing as youre effectively invisible with a high sneak skill or enchantments the gimping itself seems a bit redundant.

Overall a bad design choice.

Might this simply be a leveling thing? More powerful enemies are better at picking up on you? I had checked UESP to see if there was any data on NPC perception, but I didn't really find anything.

Anyways, what I'd like is individual perception scores, rather than simply racial perception scores. By all means, give certain races (like the Falmer) an advantage in picking up sound, but there should still be variation throughout the race.