Fab, I urge you and others to check out this mod http://www.soldak.com/forums/showthread.php?t=37042
and maybe give feedback on it. He's putting a lot work to it, but it alreadly improves the UI a lot.
I agree about the interface, in that something has to be done.. I think the lack of merchants and zombie apocalypse stuff, are the kind of stuff that goes together in this theme. There are also quests to save and bring a merchant to town (for some time). The more you play, the more that stuff will probably make sense, as getting/trading for resources in this game is going for a different style than typical ARPGs. Salvaging is more encouraged to do with your extra items, and as you play, crafting materials become more valuable to specify your character's build (and then there is NPCs equipment, that you need to find for them)
What you said about having an option to simplify descriptions would be nice. Also having less typical weapon/basic equipment drops could help and be one way to go about it (currently someone can super easily make a mod for that) I personally have rambled on in the past here about the need to make interface management simpler, on various posts on this thread. I do think we, us players, need to do a better job at throwing some more ideas out there to possibly improve it more.
Here's one little suggestion, to have identfied items on the ground show their retail value, instead of just saying (identified) This font is from the UI mod, but this money value thing is done with my crappy edit/copy/paste job, so keep this in mind if it looks weird
EDIT: One reason I just thought of, of why it can be so confusing for new players, is that when playing on lower level worlds, a rare Yellow item found in a level 1 area can be SO much worse, than say a Green or even regular item found in a level 3-4 area. So early on, the colors can be more deceiving than helpful, so you really can only look at the retail value as a quick guide. Only as you get to higher levels, the issue starts to minimize considerably.