This game is starting to turn me off…..I must be doing someting wrong.

The combat seems clunky….I've tried to like this game and in all honestly I still do. I mean, it's like oblivion on steroids. It's just that the melee seems off. When I'm swinging my sword animals can lunge at me without gettting hit. At the beginning if I see more than 1 animal I give a sigh and pass by them. When I shoot my arrows they can be on target and still not hit the NPC. I can see them hit, but still nothing. Once you get hit by whatever you're fighting theres no hope. I wouldn't mind that as long as there was some sort of method to melee. It doesn't help that the load screen takes longer than 2 minutes to load.

Someone tell me if I'm doing something wrong b/c I really still like this game and more than likely will keep playing until I get to a very deep breaking point.

Yes, as i suspected you are playing it wrong, you are hacking and slashing (in true Diablo style!) instead of role-playing….stick with the quests and the quest sequence, go to each town and talk to everyone, do the quests that you think are correct (there are some wrong/questionable quests)!! - you must build your stats and reputation up gradually until you become a powerful force to be reckoned with. Don't worry, later in the game it will all happen. Many gamers have fell by the wayside trying to be a super hero right from the start - be patient, be cool.
G3 is a beautiful game, all will become much clearer later, killing un-hostiles both human and orcs wil penalise you and endure consequences.

Make sure you've installed the latest community patch. I believe that helps the load times and the rapid fire wolves quite a bit.

Should've installed CP 1.7x
They really improve melee.

I found archery quite nice. Then I switched to a mage career and shot everything down with fireball and ice lance.

The latest CP is a must IMHO. But of ocurse it's also okay if you don't want to use it.