In my opinion, these values are completely, utterly bugged and must be changed, massively decreasing weapon contact area for a start. I remember alarm bells going off when a legendary swordsdwarf bisected a marsh titan with a thick shell across its body. Something is rotten in the state of DF, and I don't mean all that marsh titan meat spilled everywhere after a tantrumming dwarf smashed the butcher's shop. Reducing this ridiculous damage would make fights against beasts much, much harder, along with stopping them from fainting from a broken toe. My real problem with this is that 1. it is utterly stupid and, more importantly, 2. it makes the game far too easy if legendary dwarves can just cut titans in half then go home for *prepared troll lung roast*.
I have done a little more research on the matter of swords cutting bone and found some skeletons from the Viking age which have had both legs cut with a single strike and skulls cut through. Swords were clearly capable of cutting bone, but these Viking swords were made of very pure crucible steel by very skilled swordsmiths - they would be *steel short sword*s in game. These feats should not be so possible with swords of lower quality or made from weaker materials. I have yet to research how much damage iron and bronze swords could do to bone, but I know that splitting a skull with a copper sword is somewhat unlikely.
I have little knowledge of swords made of materials other than steel, so I do not really feel qualified to say too much about them. Purchasing iron or bronze swords is a very low priority for me given how expensive well made swords are.