There's actually plenty of loot. The sheer wealth of different weapons and armor types was rather surprising. Same with the whole depth of it all since there's actually both armor and and the pieces of clothing underneath. I didn't think it was poorly paced either. There's just a lot of little sidequests you can do, and those generally reward you with experience and coin, but rarely with equipment. If you mainly stick to the story missions you'll get your gear much faster.
Did you get the Golden Idol, Cornsnake? There's 3 types of idols in the game, and at a certain point in the story, shopkeepers in Gran Soren give you a quest called Idol Woship. If you give the Golden Idol to the blacksmith in Gran Soren, he'll upgrade his shop substantially (he als accepts the silver one, but the benefits aren't quite as large). You can also give it to Madeleine instead.
The best gear comes from the ornate chests in the Everfall and from fighting the online Ur Dragon. If you want good loot from the Everfall, you should bring the Godsbane with you (it'll be in your inventory once you defeated "The Dragon") Chests have a certain chance of spawning any number of kick-ass items, and your best way is to approach a chest, save your game, open the chest, see if there's something in there you want, and if not, kill yourself with the Godsbane, and choose restart from the latest save.