These are nice ideas to flesh out the system.Another possibility could be that you forge weapons to meet quotas for your kingdom or quests.
For example, the quest "Gang leader needs one-handed weapons" (or something of the like) can have the person asking for a specific type of weapon in an allotted amount of time. The more your smithing skill and the better weapons you can make should dictate how much reward you get.
In the current state it is mostly a XP grind.
I'm developing it, but for now the main use is to smelt every weapon I get and make custom weapons just to smelt them once again.
Doesn't feel right for a blacksmith to do that. ?