Did you have trouble targeting the demon of lies, or doing damage? I didn't have any trouble just with a sword (and the passive Stun skill).
Restoration potions can be much more effective than individual health or mana potions.
I found a Burning Wall spell book the first time I went through Mardaneus' house, which came in handy when dealing with a couple of the heavy orcs the first time I left Aleroth. I didn't use the spell after that, though, so wouldn't necessarily recommend investing your own skill points into it.
The publisher rushed the release of the game, so the wastelands were scaled back quite a bit and left as pretty much straight hack and slash. Larian did the last act of Beyond Divinity first, so that wouldn't happen again if they ended up pressed for time.