The differences would be between:

1. One-handed and Two-handed
2. Weapon skill (One-handed lvl 5 for example)

There is a difference in effects (if you spend a SP in a 2 Hander passive) but not sure if 1H Skill Line has something similar. 'Unmodded' weapons all have same speed

No but it's something I want added. Currently the two-handed skill tree contains the weapon differentiation, but I think those differentiations should be included in all weapons automatically, both one and two-handed. A mace handles very differently from a sword or axe and will perform very different vs different types of armor.

DAOC did a decent job differentiating the weapon and armor types. I've played single player games that have done an even better job differentiating. In a very old game from 1985 there were three types of weapon damage: CUT, BASH, THRUST, and each armor type had varying bonuses vs each type, with full plate having the greatest overall bonuses with BASH being the best type to use against it. Elven armor variations had bonuses vs CUT, dwarven variations vs BASH, wizard variations better vs magic etc. Each damage type had it's own effects beyond damaging armor: BASH could cause more bruising and injury, THRUST could cause more bleeding leading to unconsciousness after a few turns if not dealt with, and CUT was balanced between the two (there were two main types of injuries: INJURY and BLEEDING).

Beyond that, each weapon type itself had it's own unique bonuses. Axes could break shields, flails ignored shields completely, maces and mauls could bash someone unconscious, spears had range and could cause bleeding which needed tending to or else the victim would fall unconscious in a few turns, swords were pretty basic but two-hand swords might break shields too.

In ESO a mace is exactly the same as a sword or axe or heck even a dagger. Boring as hell, unimaginative, unintuitive when you consider what each weapon can do, and just fail.

After you read about how other games handled weapons and damage types you look at what ESO has done and you wonder if they ever bothered to think about it at all. It seems like it was an afterthought or they quickly threw it into the two-handed tree because anything else would be too complicated (which it wouldn't be, I mean even DAOC did much better and that MMO was over a decade ago).

Yep and that's all it is: purely cosmetic. It sucks because we all know the choice between sword, axe and mace should be way more than cosmetic.

Unless they changed it, swords have a slight damage bonus across the board, axes do bleed damage, and maces have greater armor penetration...and daggers give a crit bonus,

When DW how does passive work is having like 1 Axe and 1 Sword?
Is it 50% of bonus for each.
So 2.5% more damage using swords will give 1.2 ?