I just received the Mace of Molag and i wanted to grindstone it, but it says that i don't have the perk. What do they mean by that? That i need to level up my skill or what?

Do you have the Arcane Smithing perk?

It's a magical weapon, so you need Arcane Blacksmithing (60 Smithing) to improve it.

you need to get smithing up to 60 and then choose the perk to improve magical items - it's under the smithing skill tree. because mace of molag is a magical item.

It's my weapon of choice - have done a lot of killing with that thing.

Me too. What is the damage of your Mace?

I love that mace

I've tried to get my character to sell it, because it's heavy and makes people nervous when she carries it, and it's worth a lot. Plus, she's an archer. What use does she have for a mace? But she won't. When she's home she hangs it on a weapons rack and stares at it. I think I heard her say something about "her precious." Should I be worried?

I smithed mine up to like 66 Damage. That's with 88 One Handed though and only like +64% Fortify Smithing from Enchants/Potion with 100 Smithing, no Fortify One-Handed Enchants. With 2/3 Bone Breaker, the Mace can hit heavily armored opponents really hard. I came across a random High Elf in the wilderness the other day, he was wearing a full suit of Ebony and was fighting Frostbite Spiders. I helped him kill the Frostbite Spiders, and he suddenly turned and started attacking me. His full Ebony set didn't protect him much at all from my Mace of Molag Bal.
The fact that the Mace not only does health damage, but it's enchant also damages Stamina and Magicka is brutal. The Soul Trap is really nice too when used in conjuction with The Black Star. After every kill, i recharge the Mace of Molag Bal from the Black Star, and it levels my enchanting pretty good when i'm killing Bandits.

There is a perk that lets you upgrade enchanted weapons and armor. You must have it in order to do so.

I have a flawless Dawnbreaker but I apparantly can't improve it because I lack the skill, yet I have 100 in smithing plus a gauntlet of major smithing.

All the daedric weapons become relatively pathetic at high levels of smithing - they lack the benefit the "improve them twice as much" part of the smithing perks (they're missing weapon material keywords.) Ebony smithing won't help you improve the Ebony Blade, etc. So for damage purposes, you're probably going to be better off with a generic weapon.