You can get magical weapons in Seyda Neen for free. You might want to improve your Axe skill, though. There are some hollow tree stumps close to the Lighthouse. You might want to take a look inside 'em.
Best armour depends very much on your char's armour skill: If Light, you need light armour for best protection, if Medium, medium armour, if Heavy, heavy armour. You will not get good protection from ANY armour if it is not your char's particular armour skill.