I recently did a "naked world boss" guild run with a low level character on the EU PC server and discovered the joy of fighting hand to hand. Equipped only with my class abilities, some potions, filled soul gems and my bare knuckles, I ran headlong with the rest of my team into the fray of Summerset's world bosses and geysers to deliver a sound thrashing to any and every hostile creature that came my way. Though the carnage was horrifying- seeing so many of my fellow adventurer's sent to Oblivion in so many awful ways; thank Meridia we were able to revive in time before all of us were reduced to piles of ash! Hours later, the day was ours. We celebrated gleefully running naked through the streets of Alinor, much to the horror and delight of the local residents.
Armed with my knowledge of pugilistic combat, I decided to test my mettle solo in various settings and discovered that, yes, you can clear most of the beginner overland content and quests without any weapons or armor. It is an awesome feeling to know this, and will certainly boost your confidence if you give it a try. For those who are shy, or bashful, just put a costume or disguise on. But do try to get as far as you can fighting only with your class abilities, world skills (like soul trap, werewolf, and vampire), and unduanted skills. Your understanding of the game's combat system will be forever altered. Cheers!