Kagesegei, with regards to bleeding that might work, but wouldn't that break the smithing game mechanic? To my knowledge you can't increase the enchantment of a weapon...though perhaps with a mod where a kill happens with 1 hit, who needs to increase damage anyway (dead or deader, hehe).
Yes, such a thing may break quite a lot of vanilla mechanics. But that's what vanilla is for, haha... mods are just there to enhance or alter the game to match your individual playstyle. Personally, I would prefer a much less "gamey" combat system

I'm not sure how smithing/enchanting really work, though. Maybe it wouldn't effect them at all? I don't know.
As for the archery situation, movies are very inaccurate in showing someone taking an arrow and still be able to move around let alone fight. Even if you are able to overcome the pain (which isn't unreasonable if one accounts for adrenaline), the physical shaft of the arrow might lock up join movement. Just imagine taking an arrow right in forearm between the two bones, you will not be able to twist your arm with that shaft blocking it. I would hate to even think what it would do to you if you had an arrow in the knee (trollface
).

Very true. That's why this particular system isn't the end-all combat enhancement. I want to add my own http://www.gamesas.com/topic/1299411-concept-damage-overhaul-not-tactics/ that would base combat ability more on stamina, while health is purely life essence. In such a system, you could be very much alive, but completely unable to fight at all.
But for this particular concept, I would chalk the ability to fight with an arrow stuck in you to adrenaline... assuming that the guy who got shot is VERY unhappy with you ;-P