And the term avatar annoys me. It's no different, to me, than toon. In my book the correct term is character (I'll settle for Jo Soo's PC).
Avatars are what is displayed to the left of our posts in this forum.
Character is the term I use the most. But an avatar is not just a square image. The term avatar is derived from the Sanskrit word Avatara meaning "incarnation" or "descent, as of a deity from heaven to Earth". In a 3D gaming world, you are the god and your character is your incarnation in that world. Therefore, avatar is a perfectly acceptable word to describe a player made, and controlled, character.
Personally I think the whole smithing skill is a crock, as it stands the skill is just an alternate method of aquiring gear and now with the nerf it is kind of useless as by the time you raise the skill to the level at which you can smith good gear you will probably have already obtained it through other methods. If Bethesda are serious about having a smithing skill in future games then they really need to upgrade and expand the skill to be more than just an alternate method of obtaining and upgrading gear.
Personally, I think it shouldn't have any affect on your level and the quality of the item you create should be determined by your fatigue levels; which in turn should decrease with each item made by an amount dependent on th size and ease of making said item