http://www.elderscrollsonline.com/en/news/post/2013/10/07/ask-us-anything-variety-pack-8

"At level one, an Orcish sword will look one way, and at level 50 an Orcish sword will look very different."

wait wait wait! Are you guys telling me a weapon changes as I level? That the weapon is just an extension of my level and not representative of the crafted item? Please tell me I reading this all wrong.

Yeah, pretty sure you are reading way too much into it. They are saying that a level 1 Orcish sword looks different than an Orcish sword that is level 50. It doesn't just "evolve" when you level.