I agree, the graphics are crap. But that's not necessarily that bad. Just the textures can be muddy (Ps3 ver) especially on say, scale armor.
In the sequel, I'd want:
Consoles to be treated equal to the PC. Much much larger areas. A longer game. A balanced combat system (Shapeshifting is almost unplayably bad, Archery is mediocre). Tactics that work (maybe advanced tactics set-up, with more slots, but no default behaviour like default/aggresive/ranged). And much more side quests, and I mean this as in dungeons. Like, hidden Dragon lairs, massive sections of the game you'll miss on the first playthrough if you don't look carefully. For example, the Ageless dragon. If doing that puzzle opened up an entire lair, it'd be much cooler. Harder Difficulty, at least on Nightmare, easy and normal are all good, but Nightmare should be a really hard challenge.
The biggest one though. A more epic scale. They tried to do this in the final battle, but really, we need huge views of a massive landscape, multiple massive enemies, entire armies on screen or in the distance.
And also, more tactical encounters. More rooms where there are things you can take advantage of. For example, there might be an oil drum, and some chairs. You barricade two of the doors, roll the drum in, and fireball the room. You should reward the player for using spell combos.