crafting a bajillion daggers, making a million identical otions that will never be used and destroying every magic item you find to enchant those bajillion daggers so you can max your perks and stats and then make a potion to improve your smithing and enchanting so you can make "uber-armour"... is an exploit.
Using an in game mechanic exactly as it was designed is not an exploit. It's no more of an exploit to smith repetitively, enchant repetitively, or practice alchemy repetitively to improve one's skills in those areas, than it is to hack and slash mobs repetitively.
It's also reflective of how one improves skills in real life so from a role playing POV it's no less legitimate for someone to work as a smith/enchanter/alchemist and ultimately creator of powerful gear than it is to work as a Companion, thief, assassin or mage. The concept of a hero who starts off as something less than an adventurer is hardly a novel concept in fantasy literature and neither is the concept of incorporating those aspects of the character's life into the main story line.
Uh, yeah you are. You're misapplying a term that has a relatively objective meaning, and a negative connotation to it, to a style of play that you don't like to make it out as something that it isn't.
Not appealing to your sensibilities and upsetting a narrow vision of immersion is not the definition of an exploit. You may as well claim that anything anybody does in playing the game that you don't like or can't relate to is an exploit.