I would've made mithril armor for my Nazguls, first of all. Sauron had a wealth of mithril:
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Of what they brought to light the Orcs have gathered nearly all, and given it in tribute to Sauron, who covets it
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Mithril armor would've meant that Merry's knife wouldn't have pierced the Witch King.
Also, let's face it: would you guys
really have concentrated more on defending Mordor? You've got all the entrances into Mordor covered: Minas Morgul's defended by thousands of Orcs. The Black Gate's defended by thousands of Orcs. Cirith Ungol's defended by Shelob (whom nobody ever got past yet) and Orcs. He knows the limit of the armies against him. Why should he go on to strengthen his defences
more when there was clearly nobody strong enough to attack him? I think Sauron didn't have much flaws in his strategy. His "mistakes" are natural mistakes, IMO.