So, I voted that it's perfect the way it is...which isn't true, but it's better than "it's okay." It's great! Really! Probably better to split it into two different things, though, because they're different things with different issues, and one has more issues than the other.
Cleaning is incredible...you just probably need to do some flagging with rooms/different building so that inside town it builds up less.
So many options are brought up when it comes to witnesses where other PCs have been, without having to drag admins into it--a PC is _soaked_ for some time if they've been in the water. A significant period of time, and you can't get rid of it just by typing "clean," either. You're bloody from combat, you're dusty from travel. The problem with the latter is that travel inside Utterby makes you a bit too dusty, though I know you can change that with some better building/flagging...even if it might be a touch time-consuming.
So, dirt/dust/mud/blood, all that? It could use a touch-up.
Repairing got trashed a bit with some various building--gear in this game has metric butt-tons of HP, from what I can tell, and some built-in portions of gear-repair were jury-rigged and messed with...but outside of a pwipe/gear-wipe, I'm not sure it can be brought back in-line.
How repairing armour was originally intended:
Armour received wounds that were classified much like PC wounds. High-end wounds would be huge or perhaps massive, and these(whichever was highest) could be repaired...partially. The damage would switch from "massive crater" to "permanent crater," "massive rip" to "permanent rip," and be unfixable, lowering the item's max HP. Enough of this, and you would replace the gear. Weapons/armour would move from pristine to worn to damaged to ruined and eventually become destroyed(hazier on the last state).
How it seems to work now:
I've seen huge holes in armour, but not massive, but it doesn't matter because PCs can't repair either, and even that doesn't matter because armour can take so much damage that the even with 3-4 essentially permanent wounds and a dozen+ forgot-to-get-it-repaired large wounds...it still only reached worn. Armour's a little wonky right now, honestly, and is a bit too tanky, I'd say, but that's personal preference.
How repairing weapons was originally intended is essentially how it works now, AFAI can tell, so they're fine. HP balance might need fine-tuning for Laketown, but I doubt it. Weapons are justifiably long-lived, but require a continued gold-investment to keep ruinning for long, but will not last forever.
ETA: The balance on armour/weapons when it comes to repairing is probably perfect for now, because it all costs a bit too much(read: a lot too much for more casual players/newbies)) from what I can tell, so it needs to be cheaper or more expensive depending upon changes.
ETA 2.0: http://forum.parallelrpi.com/doku.php?id=armor
Creator's guide to wear-and-tear for the same codebase, credit to Kithrater.