Is the arrow I'm about to unleash going to feel the effects of gravity, or not? If so is there a general rule of thumb for how much compensation should be made when aiming to account for its effects?
It's darn tricky!
Arrows are affected by gravity.
But to compensate for this fact, the game looks at the range of what's in your cross-hairs and automatically adjusts your shot up "some". At long range this automatic adjustment tends to under-correct, sending your shot low!
But if you manually adjust, you'll be aiming at the mountain behind your target. The auto-adjustment will kick in abundantly against this far target, sending your shot high!
Incidentally, this auto-correction is why your shot lands behind you when you shoot straight up.
Skyrim does not have auto-aim as such. Arrows are (by default) fired at a fixed upward angle above the crosshairs - if you aim directly at a target at close range, the arrow will fly over their head. Personally, I found this incredibly difficult to get used to, since I had to sometimes aim high, sometimes aim right at the target, and sometimes aim low to hit it.
Fortunately, this can be disabled, assuming you're on PC. Go into
My Documents\My Games\Skyrim and add the following lines to
[Combat] f1PArrowTiltUpAngle=0.7 f3PArrowTiltUpAngle=0.7 [Actor] fVisibleNavmeshMoveDist=12288.0000
(If you already have
[Actor] sections, add them to the existing section instead of duplicating them.)
The first two will cause arrows to fire directly through the crosshair in both first- and third-person view modes. The last extends the range that arrows can hit at; without it, many people have reported seeing their arrows pass right through targets without registering a hit when firing at long range.
Arrows in Skyrim have very little drop. I read somewhere (looking for the link now) that for distances less than 100 yards, it is an 'instant' shot, that is, it will go exactly where you point it, no need to lead your target. For distances past 100 yards, you do need to lead your target and there is an almost imperceptible drop.
I find that I don't have to actually account for a drop unless I'm really, really, really far away from the target, and even then it's 'just above' the target.