Years of video, miniature, and roleplaying games have propogated the idea that 'melee' is virtually any form of combat not using ranged/missile weapons or spells. Perhaps a better term than "hand to hand" or "close combat" is needed, but 'melee' is not it. Not to pick on 3rd and 4th edition D&D, but the carefully plotted movements on a grid only exacerbate the issue. The goals: give players choices, making decisions interesting and tactical, and encourage character teamwork. Nothing wrong there. The result: 5 foot squares, fixed targets, and relatively static positions.
Sorry for getting all wikipedia on y'all, but the term melee means "when groups become locked together in combat with no regard to group tactics or fighting as an organized unit; each participant fights as an individual." Why is the dictionary quoting important? Because it's historical accurate (for simulation fans) and it's what Gygax and company were thinking of (for you Grognards), and it's fun.
Look at a couple of cool (choreographed) movie fights:
Even when it's not planned: http://www.youtube.com/watch?v=Ry47zyrYGt8
Sure, duels are your typically melee, but it gives you a taste of the fluctaution of position and movement. People are moving, switching positions. Someone moves five feet, the other follow. Fixed formation fights can occur (Greek phalanxes, shield-walls, and Roman infantry techniques). They have their place and deserve their own rules. Perhaps trained fighters could use them in a dungeon corridor, but the positioning should be the exception, not the default assumption.
The idea is that melees are a mess and disorganized. The AD&D rules reflect that. Firing missile into Melee. Closing vs Charging. Spell casting during melee.
How do we reflect that?
There is a zone of melee and zones (areas) outside it. Closing and Charging (per AD&D) get you into the zone. Fleeing and falling back get you out. Smart spell casters stay out alltogether. Large areas may have more than one melee zone. Firing missile weapons? Take your chances on shooting into the melee, or try to target some outside of the zone.