Was having a think about a mod like this over the past couple of days. Just seems a bit strange to me that you can improve the bow itself, but not be able to refine the arrows at all on the grindstone, or bolts for that in the case of the crossbow.
The way I see it, to be able to improve an arrows damage capability, you'd have to have an average of both the smithing and the archery skills to determine if you can make a fine arrow, exquisite arrow and so on. The reasoning being from a lore friendly perspective is this: A skilled archer would have a better knowledge as to what would be required to refine their arrows, but would need the appropriate smithing skill to be able to carry out the refinements in question. It'd level in a similar scale to other weapons that can be refined on the grindstone, so the arrows themselves wouldn't be overly powerful.
How this would be carried would depend on what can be executed with scripts and the limitations of the Creation Kit. If the ammo types can be refined, then improving them at a grindstone with an ingot or individual arrowheads of the same material used for the arrow would be feasible (maybe in batches of 20 or so for the ingot, individual ones with the arrowheads route). Failing that, the other option would be to create the individual arrowheads that can be crafted at the forge, refined at the grindstone themselves (maybe using other arrowheads for relative simplicity's sake), and then combined with the base arrow or firewood and crafting feathers to create the improved arrow at way. Obviously the first method would be preferred, but got a feeling the second route might the way to go, which would necessitate creating custom arrows for each type in the editors, as well as the arrowheads and so on.
Was thinking about having a go at making this myself, but as I've barely scratched the surface of the Creation Kit, it might be a bit beyond my abilities at this stage. That said, will see if anyone else more capable might be willing to give it a shot first before I even consider attempting it.
Aside from that, any reason why it might not be able to be carried out at all?