Well I'm level 27 now and have the same sword since level 10. It's the Steel sky forge one that the companions smithy gives you for doing a job for him.
I assumed as soon as I found a dwarven sword or orcish sword the would deal more damage but they don't.
Im dying a lot, as I mentioned I'm level 27 and damage output is still 41( steel sword)
Dwarven does 39. Orcish I think was even less.

My smithing is 65 so they are all flawless but still the steel sword is better?
Also I don't understand why some items I can make flawless and others I can't. I have the steel, dwarven and orcish perks in smithing. So shouldn't I be able to make any iron, steel, dwarven & orcish weapons and armor flawless?

It's wierd because I had a dwarven bow(superior)
and made it flawless, so I made another one and could only get it to superior. Why can't I make it flawless like the one I already owned. It's done this with steel items too.
Don't know if I'm just being really dumb, was just a little baffled.
Any advice would be great thanks

Odd, I am level 30 and am carrying about an ebony sword for atleast 7 levels already, same with my glass bow.

It's skyforge steel, normal steel swords are not better than either orcish or dwarven. Skyforge steel is however

And weapons can only be improved to their maximum level. So iron can only be made fine, while daedric can be made legendary. It would not make sense to have a iron and a daedric sword both legendary. Hope this helped.

I have an exquisite Iron Sword. It just needs higher Smithing, since there is no iron smithing perk.

I don't think you understand how the smithing system works, you can absolutely get iron to legendary. Look at this uesp link - http://www.uesp.net/wiki/Skyrim:Smithing - then scroll down to the item quality table.

You will see the skill needed to improve weapons to various different levels, the perks reduce the skill needed to get the item to the levels. You can improve your skill past 100 using fortify smithing potions or/and fortify smithing enchantments.

OP, here is another link to uesp - http://www.uesp.net/wiki/Skyrim:Weapons - you will see a list of the different swords and their damages, the skyforge steel sword has a base damage of 11, dwarven has 10 and orcish has 9. That's why the damages differ.

With the steel, orcish and dwarven perks you can improve all three swords to the same level. You may have been using fortify smithing enchantments/potions when improving one weapon, but not another, that's why the levels are different. With the same smithing level, you can improve them to the same level (not the same damage, the same item quality level).

You could be right I do have a set of smithing gauntlets but I'm almost certain I never changed them until I finished. It was 3am in the morning so I may well be wrong. Thanks for the link.