The weaving process works like this: raw nettles and hemp weigh 0.5 lbs each, raw flax weighs 1.0 lb each.
- Raw plant (0.5 lbs)
- Soaked plant (2.0 lbs)
- Dried plant (0.25 lbs)
- Raw fibre (0.1 lbs)
- Spun yarn (5x fibres needed, 0.5 lbs)
- Woven cloth (10x yarns needed, 5 lbs)
So the weight of the output fibre/yarn/cloth is one-fifth of the weight of raw plants that go into the process (no weight is lost in spinning and weaving). If you've got 116 nettles, that's 58 pounds of raw plants, which will produce 11.6 lbs of fibre, just as you say. That's enough for a fair bit of clothing: the cloak is the biggest, which takes 6 lbs. If you want to make quilted items (Which you should! They're really warm and light!) it'll take more. I'm obsessive, so I go out and gather a ton of raw nettles - I've got something like 1000 lbs kicking around. I'll just make it into soup if I get sick of weaving.
As far as smithing, water isn't necessary (although probably should be for tempering) nor is it necessary to have it indoors. A furnace makes it marginally more convenient, as you won't have to keep relighting a fire for each stage. I just set mine up outdoors next to my shelter.
Playtesting the smithing with hurt, helpless, and afraid (i.e., no metal axe), I can generally manage to craft myself a metal axe within about 2 months of my start, fitting in smithing between food gathering and other activities. Once you get a metal axe, it gets much faster, as firewood chopping and charcoal burning is by far the slowest part of smithing.