I suppose I thought this was common knowledge, or that there was a helpfile for it. But I suppose if you're newer to the game, it probably hasn't been explained to you.

Yes, there is definitely factors that go into weapon level vs player level. This is mostly to act as a balancing factor. I'll try to explain it as briefly and to-the-point as possible. Others may have more to throw into the answer.

This really only applies to lower level characters. A low level character cannot wield high average/high level weapons with the same efficiency a character around the same level of the high average/high level weapon could. So you can't go and loot a hero, take his level 50, average 28 weapon, with your level 15 fire giant, and expect to dish out mangles like the hero would. You'll definitely get more damage out of a weapon that is at or around your level, or obviously, lower than your level.