Stratos: I agree. If you want to simplify the game make arrows cost rubies is a great fix.
Personally, I see having unlimited arrows as problematic. To me there was an important item management balance to Zelda games. I always viewed the boomerang and the Arrows as different, because the arrows could kill, but I could run out of arrows. The Boomerang was limited in range, and couldn't kill, but I never ran out of boomerangs, AND it could stun enemies.
If I have unlimited arrows, why would I risk moving in on enemies that I can easily kill with arrows? Why would I risk that extra damage. Even if enemies are smart and can block arrows, I may still be able to sneak behind them and attack.
Does this mean magic arrows might play more importance? This to me is the only reason to go this route. Perhaps magic attacks will be linked to shooting arrows, and therefore, you use magic to hurt stronger enemies. Having 2 items to manage then would be pointless.
Now, for the positive I love the idea of item enhancements and upgrades. Hopefully, Nintendo allows the players to choose which items/when/and how. I think it would be good to have a few items that MUST be upgraded, but mostly, have the basic items be the only thing needed for level advancement. Then players can have a sort of custom play style. Maybe I want to use the hammer more for area of effect attacks, I could upgrade that to be stronger and faster. ect.