I completed the game several times with NO armour (both with and without diggers trousers) but that was experimenting to see if it could be done. Also i once completed the game with no weapons, just fists and some magic. There is no "one way" in playing gothic - the choice is yours alone.

This substantially proves that the story line does not rely on using weapons or armour as a predetermined requirement to the game's completion. The main requirement in G1 is appeasing the gods as explained in the books and is sadly the most overlooked concept by most players.