I would like to stick with my imperial armor, but it is certainly worse than other stuff I have found. I see that I can upgrade armor and weapons myself, but no smith offers an option to upgrade them for me. Does that mean all hope is lost?
You have to do it yourself. And if you want something with a little more kick, stock up on blacksmith and fortify restoration potions and use them both while smiting.
You can do it yourself and all it takes is a little application and it really is worth doing. The more you smith the better your smithing level will become. Look at the smithing perks and work it the way that suits you best. Having said that I'd be interested to see if after much more play you really want to stick to imperial armour, there is so much more out there that may change your mind.
Wouldn't it be nice if other NPCs could upgrade your armor and weapons for a charge? Anyone know of a mod that does something like this?
Due to smithing as of patch 1.5, this wouldn't be a bad idea. It certainly could be impossible for players to max out smithing without weeks of grinding.
AS an ask, did this include when they tried to behead you?
Perk smithing, enchanting and alchemy and you will boost Smithing to a point where your Imperial Armour will be quite reasonable as compared to base levels of all else. Also a good earner.