Ugh. I just read all that and can't come up with a great solution.
What's the precedent on treating a manufactured weapon like a natural attack?
I think the weapons should probably increase the damage, but changing types is some improvement also.
Maybe we should try a different tack - do we want the melee weapons to be a definite boost to the Houyhnhnm's melee capacity (a couple more points of damage), or more flavour (switching damage types)?
I'd say let's allow them to treat armor spikes and/or spiked gauntlets as monk weapons.
During the multi-day outage, I worked on flavor text for these guys. After re-reading the entry, I think we are focusing far too much on making these fellows adequate combatants.
Based on the original text, few, if any, would be warriors. Most houyhnhnm should be Experts. I'm still fine with giving the special monk weapons and whatnot to houyhnhnm monks, but I think we should back off on flurry of blows and similar mechanics for standard houyhnhnm. This is a race of peaceful philosophers, who have only engaged in battle once in their history.

(Dungeons & Dragons)
Rulebook featuring "high magic" options, including a host of new spells.