You can find additional teeth for Morte, as well as different punching daggers for Annah; I don't know who else is in your party, but the same generally holds true for the rest of them, except for Ignus (whose standard attack is a fireball) Dak;kon (whose sword upgrades throughout the game depending partly on his morale), and Fall From Grace.

As to your more general problem... yeah, that's going to happen. D&D is specifically balanced so that fighting is more effective at lower levels, but magic gets powerful at higher levels, to the point where fighters come to rely on buff spells and advanced tactics (i.e., backstabbing) to get through most fights; it's not that they become useless, but you need to know how to use them.