The character freezing as you approach the gate to farglow is a known issue (though uncommon). Another person reported lowering the graphics options to get past there, and was then able to save and raise the graphics options back to where they were. It can help to head directly to the gate from the start of the game, and not delay or leave the path to kill rabits, etc. Usually, though, you should be able to quicksave if your character gets stuck there, then quickload and continue.
Unarmed combat should indeed be challenging at the start of the game. In DKS I played a ranger (on nightmare) that used some unarmed combat at the beginning of the game, but after a few levels I learned a couple skills and adjusted my tactics so that I rarely needed to fall back to melee combat. I'm actually planning on starting an unarmed warrior in D2:DC someday. In DKS I stopped distributing stat points after level 15, but I suspect that will not be possible with an unarmed warrior (strength being a significant factor in damage, since no weapons means no associated damage, bonuses or damage enhancing enchantments).
I restarted about 10 times, and nothing worked, whether I went straight there or not. I did try saving in the part I was stuck and loading but didnt work. Only thing that worked was lowering all the graphical settings. I have turned them right back up and it works fine so far. I have a pretty good computer too, i7 cpu, 6gb ram and gtx560ti card, so I wouldn't expect that had anything to do with it.
Ive always liked unarmed combat and magic. Unarmed seems more interesting to me than using weapons. Unfortunately unarmed is either not well developed or not used at all in most rpg's
