What really bugs me: Magically having items on my person without physically having to get them (e.g. lute, bucket of water).

What is a lost opportunity: I find cool items (spyglass, dice, earrings, etc.) and cannot do anything with them but sell them.

What would make everything better:

Make the jewelry wearable. More slots.

Make all appropriate non-wearable items do actions (so I use spyglass and can look in distance - n64 games have this for goodness sake, use torch, use dice to roll visually, everyone sees, etc.)

All items that could have a use, could have the use, and these items would be required to do the action. Possess and Use lute to play lute, otherwise, cannot do that. Makes no sense.