Damage resistance? Exclude it.
Whoa whoa whoa!
Why would we need to exclude damage resistance/immunity? Actually, I would agree on excluding damage resistance for other reasons unrelated to damage types, but presumably your logic would include immunity as well, right?
The problem isn't damage immunity -- the problem is when stuff becomes about stacking damage immunity and you wind up carrying around 50 pieces of gear for different situations. But there are at least two major ways to avoid that:
1, any item with damage immunity has it to all damage types, potentially divided along something like the physical/non-physical spectrum. Siege of the Heavens does something similar to this -- every "upgraded" item you get has 5% damage immunity to all damage types, meaning by the end of the adventure you're taking 45% less damage which is basically doubling your health.
2, restrict things to certain item slots. For example, if only cloaks have immunity to fire, then you could slowly increase the percentage as the character levels up. So a level 20 character might have 10% immunity to fire, a level 30 might have 25% immunity to fire, and a level 40 might have 45% immunity to fire. Or something along those lines. And as long as those are treated as "upgrades" to the item rather than replacing other properties (in other words, it's a choice between a 2 AC cloak with 5% fire immunity OR a 3 AC cloak with 5% fire immunity) then you don't need to worry about people swapping in certain cloaks for areas with fire damage.
Hell, if you're willing to put in the scripting work you can customize the percents of immunity very precisely and use OnEquip type scripts to apply the effect (so you're not limited to both 5% increments and additive immunities).
The main thing that throws a wrench in this is Elemental Shield due to the whole additive stacking.
Bonus damage? Exclude it.
Whoa whoa whoa!
Why would we need to exclude bonus damage? The problem is not the existence of a flaming longsword (or a lightning sword, ice sword, etc). I agree, those are cool and a staple of games.
The problem is the fact a fire elemental/fire giant/red dragon is immune to fire. Remove that and you can have any thematic weapon you want with no problem. In all seriousness, have you ever read a book or watched a movie where the hero has a special weapon and then fights an enemy who is immune to that special weapon? I haven't. Aragorn doesn't carry around five swords specialized for fighting orcs, ring wraiths, men, trolls, and squid abominations from the lake near Moria.
Items will be left with AC bonuses, enhancement bonuses and some others, not so vital ones, like vampiric regeneration or an on-hit property.
In my "ideal" world (due to the problems with 1H + shield, 1H, dual-wield, and 2H -- basically what Kalbaern talked about with no ability boosts on anything in the weapon slots) weapons can have attack bonuses, damage bonuses, bonus spell slots, Holy Avenger, keen, massive criticals, on-hit, and vampiric regen.
Non-weapons can have AC, ability bonuses, bonus spell slots, freedom, haste, damage immunity, immunity to specific effects, regeneration, saving throw bonuses, skill bonuses, and true seeing.
I'm intentionally leaving some stuff out that I don't like seeing on items (like Improved Evasion or Knockdown) and I may be forgetting some stuff as well.
Incidentally, the on-hit doesn't have to be non-vital at all. You can make that whatever you want with scripting -- whether it's a sword that has a chance to burn victims and cause more damage over time, a dagger that increases your AB by 1 for 6 seconds every time you land a hit, a rapier that increases your AC by 1 for 6 seconds every time you land a hit, a mace that chills opponents and reduces their movement speed/AB/gives spell failure, acidic arrows that leave enemies more vulnerable to damage in general...I could go on. You can practically define weapons with special on-hit effects.
