I'm starting to think it would be better to split skills into two broad categories - Combat and Non-Combat.

It would solve the problem of leveling up non-combat skills contributing to your character's level and all the consequences of that given that the game scales with your character.

But I'm not sure if I'm thinking this through all the way. What do you all think? Do you think it would work and if so do you think it would be better?

Aren't a bunch of non-combat skills (smithing, enchanting, and alchemy) one of the best ways to become super-strong in this game though? Maybe it would help to have more ways for non-combat skills to contribute to your combatibility, like having high speech let you control more followers or something. Lockpicking could be turned into a skill that'd let you set traps along with disarming them and opening doors. (might need a new name though)

I have once remark before on a similar suggestion:

If any challenges should be scaled based on skill levels (or skill category levels) then they will be no challenge at all.

For example, I have a warrior with low speech skill. I would never fear a speech challenge become it is scaled to my low speech skill. Similarly, a merchant player will never fear attacks from enemies because he knows the world will never sent him anything he cant defeat with his puny combat skills.

Such a system will negate all player choices.