Gems and enchants - Strength is king. Keep your hit and expertise capped, but strength is always king. Get rid of the stamina hybrid gems and for god's sake, ignore socket bonuses.
EG: You have a red and blue socket with a bonus of 4 strength. You could throw 2 20 strength gems in there for 40 strength or one 20 strength and one 10 strength 15 stamina for 34 strength 15 stamina. So the socket bonus loses you 6 strength.
Enchants missing, your chest and cape were unenchanted, your boots had a strange enchant, other than that I think you were fine.
Losing hit being bad depends entirely on how much better the weapon is.