ARGH!! The +5 to skill works like this, folks...
You skill cap for weapons is level x5, so at level 10, your max skill is 50... unless you have a +5 racial modifier (i.e. dwarves, humans, taurens, etc). In that case, your skill cap will be 55.
So, what does that mean?
It means that you have a better chance of hitting stuff! For the purposes of that weapon, you are an 11th level character. Added hits = greater dps = faster kills = faster exp gain (especially when you consider you can kill things one level higher than normal, thus getting more exp per kill).
That's it... really. Not a HUGE difference, but for some folks it will be worth it.
P.S. As for added damage, I think damage output is based on character level, not skill. I could very well be wrong, but that's the impression I got from playing in the beta.