The inventory management is extremely crappy in the game, but to be honest, it's one of the hardest thing to develop in a RPG.
As for what I thought of, after struggling for an entire game with this inventory:
1/ Reduce drops from mobs. Seriously, mobs don't need to drop 1-3 items each. 98% of the dropped items are useless and meant to be sold. BUT, money has still to find its usefulness in this game. All I bought in an entire game was 5-6 tomes and 5-6 legendaries. I ended up with full stacks of gold on my 4 characters... So, just reduce the drop rates, we don't need the money, thus we don't need the useless items. That should get some fresh air to the inventory. To balance it, simply change the weight of the items (a plate armor shouldn't weight as much as 8 potions ; also, a mage with 5 strength shouldn't be able to carry 20 plate armors without efforts...). Increase dramatically the weight of armors and big weapons, for example. Less items in the inventory...
2/ Add a specific window for craft. I know there is a tab for ingredients. But sometimes (well... pretty often, actually), you need to craft items than are not considered as ingredients. Thus, finding your 2 items can take a looooong time as you need to get them close enough so you can drag one on the other one. Just create a little window for crafting, that you can open with a single button, then simply drag the items you want to craft in this window. This way, you can look for your ingredients using the tabs (for exemple, ruby in ingredients and armor in equipment), without having to get them close to one another in the inventory. Also, it can be a nice base if you want to improve the crafting system later, for example allowing to combine more than 2 items etc. That'd also be nice if there were a list of unlocked recipes when opening the craft window.
3/ Add the possibility to change the look of your tiny bags. It's helpful to have bags to sort some items, but they all look the same, and you always have to search for the right bag first. If the bags don't look the same, it can help a great deal sorting the inventory.
4/ Add customisable tabs. If a player can create his own tab and add "markers" to some items for them to appear in the tab, it would be awesome. It can help finding useful items much faster (if it existed I'd have created for myself "quest related books", "useful items" with pyramids, golden grail..., "do not throw" for items I can't wear right now but want to later etc.).
Cheers!
