Full hide armor gives you a total displayed rating of 40 (with 0 skill and no perks), plus the 100 hidden bonus for wearing armor at all, gives 16.8% damage reduction. Full daedric armor gives you a total displayed rating of 98 (with 0 skill and no perks), for 23.8% damage reduction. So upgrading from the weakest to the strongest armor in the game only increases your damage reduction by 7%. Even with 100 skill in heavy armor (but no perks), full daedric only gives 28.5% damage reduction, which means (more or less) that an enemy who previously took 3 hits to kill you, will now need 4 hits.

But once you take smithing and the armor perks, it's easy to reach the armor cap, for 80% damage reduction. Now that same enemy will take 15 hits to kill you, which is never going to happen.

I guess what I'm getting at is that it seems you're very squishy up to a certain point, when suddenly you can basically ignore incoming damage, and just run around dual wielding and killing everything. Also, since NPCs don't get perks or used smithed gear, their armor never gets above 28.5% damage reduction, which just isn't that much.