how is it that a paladin, devoted to honor and right, uses the black star? 

Aedric Paladin's are opposed to the Daedra, so it only makes sense to screw a Daedric Prince out of their artifact.

but azura is not evil, in a daedric sense of course, i have no problem trapping  the souls of necromancers and stuff but.... not all the people you kill deserve to be stuck in the soul cairn suffering forever, a bit harsh imo.

This Build is so awesome i especially love the paladin of the divines. One question though how do you get an imperials face to look that good?

Yeah I only soul trapped super evil people like boss-level necromancers and vampires and such. Keep in mind though that the Black Star works on all souls, not just black souls.

Spend some time mucking around with the character creator - I recommend modifying presets rather than making it 'from scratch'

I cannot help but feel that the Steed standing stone is better than the Lord stone for such a character.

You are so heavily armored that without the heavy armor perk that removes the weight of the equipped armor you will find your self becoming overloaded very easily and lose a lot of stamina in sprints.Plus as a blacksmith you are likely to carry ores and other crafting materials with you that also add to the load.

This is a heavy armor build that also uses flesh spells for even more armor. The lord stone feels excessive to me

I also found a PC mod that can add some extra spice to the paladins

What the mod does is that is adds a small shrine with Meridia's figure where you gain the "imbue weapon" lesser power. When you have this power switched on your melee weapons will all produce the  Bloodskall blade energy blast. Plus you can configure it from the SKYUI mod menu to change its color (Gold is my choice) and decide if you want the damage of the effect to scale with your weapon skill or you want a static damage between 0 and 600 (!).

I used this effect while wielding the Dawnbreaker to experience the most awesome massacre of undead evildoers ever! I have a paladin whose swords shoot waves of divine energy at the enemy!

The mod is called "Imbued Weapons - Bloodskal Effect with any Melee Weapon"

This definitely looks like a build I could get into, particularly like the two different styles of which to play but the Meridia one is more of a cultist than a Paladin but it looks fun :)