Well the game will never be Gothic or Gothic2 (some of my favorites as well BTW), not many RPG's with that kind of simple, awesome combat system...plus Gothic games were made for an audience that appreciates difficulty..IMO.

That said, yeah it gets better, make sure to get the perks that actually give new techniques, like the slow mo block, bash, etc...
Combine that with shouts like unrelenting force and elemental fury, and on high difficulty levels melee can be reasonably fun and challenging. High stamina + elemental fury enables you to chain power attacks, it can be overpowered but I find it fun.

For melee, try to create a build that relies on power attacks rather than run in and button mash, i've personally found it much more to have to rely on running in and successfully landing power attacks.


So yeah, get some shouts that work well with melee, crank up the difficulty a bit if you haven't already, and I think you will have fun, i'm enjoying the block tree myself. You also have to not deck yourself in the best available stuff to combat interesting.again imo.