Well, you can technically pound rock with mallets or hammers; not as effective at smashing rock as a pickaxe is, but it can be done. It's easier to pound down walls with mallets/hammers if it is a thinner wall, so that the rock thus pounded can go somewhere. Though, thinking about it, Axes and Flails wouldn't work, so ignore those.
Although a hammer is definitely the best for smithing for it's flat surface, in a pinch a club or mace could be used to pound metal into proper shapes; not as effective, but if you pounded with a mace or club enough, eventually one side could become flat enough to work in a similar manner.
I had suggested those above, so that you could utilize tool use with a variety of different items. An alternative of course is to just increase the drop chance on tools so that they occur naturally in loot more often.
Also, it is a video game. Why does something have to work in reality, in a game not based on reality? You can't cast spells, become corrupted, or play as a different race in real life, so why does real life applications of items NEED to apply here?