You can improve weapons and armour at the workbench or grindstone, if you have the appropriate items, usually metal ingots. However normally you can only do it to unenchanted items. If the item has an enchantment, then you can only do the above improvements if you take the Arcane Smithing perk.
Yes. You need the Arcane Smithing perk from the Smithing tree, before you can improve enchanted items. They 'count' as Daedric for the 'improve twice as much' bonus given by perks on the Smithing tree, so you can improve them normally with just Arcane Smithing, and twice as much with the Daedric perk.
You have to have the perk, which requires 30 smithing.
An mix of Blisterwort, Glowing Mushroom, sabre Cat tooth, or Spriggan Sap will give you a fortify smithing potion
There is a potion that improves your smithing level allowing you to imnprove armor better. with 100 smithing and a smithing potion you can upgrade the legendary armor and weapons. the damage or armor rating will increase.
To better use the grindstone you need better smithing skills.
You use the anvil at any blacksmith's, or you could use the Skyforge. Remember you need 100 Smithing so you can take the 'Dragon' Smithing perk.
You make it yourself once you reach skill level 90 on Smithing. You need Ebony Ore and Daedra Hearts.
Smithing is useful for pretty much any character build in Skyrim. Coupled with enchanting, it allows you to make decent gear from the items that you acquire throughout the game. An assassin character that knows smithing and enchanting could smith some dragonscale armour (light) and enchant it with sneak and archery/one-handed bonuses.
There's no reason why you should wait until then. Every time you do the upgrade, it will update the bonus to whatever level your Smithing dictates. So say, you could upgrade it at Smithing Lv74 to Epic level, then when you max Smithing, you could do it once more to upgrade it to Legendary (only needs Lv91). You never 'lock in' a lesser bonus.
You need 1 leather strip, 1 Orichalcum Ingot and 1 iron ingot and need your smithing to be level 50 or 80 :) Hope this helps
It is actually really easy. All you have to do is get a lot of leather strips and iron bars. Then keep on making iron daggers till you are level 100. It shouldn't take long.
You might not have the right material, or you might not have the right level of Smithing, or the necessary perk for the material the bow is made from. You may have upgraded it already as far as your current skill levels will allow.