Skills
 

Ironworks
Woodworks
Baking?
There should be a skill percentage sort of like the sword (but add it when that whole disapearing of level is fixed) and have it so your not instantly good at the following above..but you must work on one and become master. However there is no 100% for all of them

Lets look at player A
His ironworks skill is at 100% meaning his a master smith
While he has 0% skill rating in woodworks.

While he can make a sword without mistake of ruining the craft he will have trouble working with the wood works making his woodcraft have less a chance of completing.
Of course each successful craft would give you a percent but lets say this player wants to go into woodworks and stay off ironworks for awhile...each succesful craft on woodworks he gets +1% to woodworks and -1% to ironworks so now his skill rating is
99% Ironwork
1% woodwork
The sort of system will keep someone from being a master at everything but be good at one thing and with this sort of system a trade system will become very healthy...right now people can do and make whatever they need..if it was to become more rare to make one of each craft a player who wishes to stay at woodworks would try to trade some of his craft to acquire some of the other crafts..

Eh just a though I suppose

Nah, no balancing...that encourages people to get stuck doing just one thing forever. Go with levels. At level 0, nothing happens, as your levels increase the chance that you'll economise and only use 0.8 iron to make a blade goes up, the chance that you'll make a better blade than you were aiming for goes up...like Master Smiths occasionally make a Blade2 when they select Blade, it can be used as a regular blade if you're desperate but it's the only way to get a Blade2, and you need a Blade2 to make certain swords...