I'm guessing both of you went with non-combat oriented characters? The leveling system is a real bitch for that type - it assumes that you've got better at combat, but if you are leveling up because of passive skills, you won't have.
Assuming you don't want to scale down the difficulty, the best thing to do is to spend some time focusing on the summoning (conjuration?) skill. You can improve it without actually fighting, which makes it the easiest 'useful' combat skill to improve. And the strength of the summons scales with difficulty, so they will always be semi-useful.
edit: For those who hate the UI, there's a decent UI mod that doubles the number of items you can see in inventory (etc). http://www.elderscrolls.com/forums/index.php?showtopic=295081This comment was edited on Mar 25, 17:58.