There seem to be several problems at work here. A creature stabbed multiple times in the body with a spear seems to not be adversely affected in the short term. Blood loss takes really quite a while unless arteries are hit (typically in the upper leg).
This is actually sort of realistic, but what is not so realistic is that the creature is usually not impaired at all until it bleeds out. Even organ hits don't cause much problem until vomiting/loss of breath etc kick in. Speardwarves regularly mortally wound an opponent then get mauled and killed by it before the wound takes effect. There should be a system of shock, pain and trauma whereby attacks and other actions performed by a seriously wounded creature are of much less potency. Otherwise the instant part-removal of hacking weapons won't really ever be balanced against the deep wounds caused by stabbing ones. Sufficiently large and tough creatures should of course be able to ignore some level of pain and continue fighting mostly unimpaired, but right now it's just silly.
A similar problem seems to occur with breaks. A shattered foot bone should make dodging, moving or even continuing to stand extremely hard. A shattered shoulder should make a shield very hard to use or a weapon held in that arm totally useless. At the moment there's a system whereby creatures can lose hold of items, but it's totally binary as far as I can tell - operating normally or useless. I think we need gradual impairment of action.
There also seems to be another issue with relative weapon/part size. It's ludicrously easy for an axe to penetrate gauntlets and sever hands, but at the same time it's nearly impossible for that axe to even scratch the paint on a breastplate. The weapon size vs body part size is having a very large effect, when you really should be able to create small wounds anywhere on the body if you can penetrate the armour - this is assuming gauntlets and breastplates are of equal thickness, which seems to be a reasonable assumption. This one may actually be a bug, because it seems the thickness or size of the part being hit is checked before the armour it's wrapped in takes effect. This contributes to another problem...
...Material hardness effectiveness. If something is harder than what you're hitting it with, nothing ever seems to happen, regardless of the strength or skill level of the attacker. This means that a copper maul wielded by a legendary-skilled male giantess has no real chance against a fully steel armoured dwarven peasant. Of course, hardness should be an important factor, but it is currently overpowering everything else: skill, strength, etc.
There would also appear to be little or no relationship between the size of an attack surface, the strength of an attacker and the depth of the wound. If we assume that a given strength means the ability to impart a given amount of force, then that force hitting over the 40000 area of a battle axe should be much lower than hitting over the 20 area of a spear. But the spear doesn't appear, to me, to be significantly better at penetrating armour or doing serious damage to an unarmoured target, although possibly its ability is being obscured by the effects described above.
There's also a few other oddities with weapon and stone traps, bare arms, bronze vs iron vs brass vs copper vs steel, the utility of leather by itself or under chain/plate, and I'm sure many other smaller things. In any case, I'm confident this awesomely complex and involved combat system can be fixed with the tweaking of a few of Toady's formulas, and possibly with the minor addition of a new shock/pain system. I'm eagerly awaiting the time when Toady gets to rebalancing things.
In the mean time, do *not* embark without flux, always use axes, don't embark where there might be undead/unalive creatures and finally mod breastplates to include pauldrons. It's a hell of a lot of fun.