I have the notched pickaxe it does nothing
Smithing works in steps, you raise smithing 13 or something levels and you can upgrade base damage with one on weapons and armor two armor rating.
as you have skills and perks you typical get two more damage for each step, however geting an small skill increase or bonus might not take you to next level.
Now if you don't have the perk for the weapon and many unique items don't have material perks they are twice as hard to upgrade, you can find, buy or make enchanted items with smithing bonus +40% and potions up to 50%. think you need 180 to make everything legendary.
However you can continue to improve items you have perks with past legendary, so they will usually be better if you are an good smith.