Your passive damage skills and those on weapons are separate. There will be a chance for level 2 lightning damage to be added from the sword as well as damaged from your skill, so both may be applied in a single hit (though there is only a couple percent chance of that). Same goes for DeathBlow, but if the first one checked is successful, the other one doesn't matter.
The first time you wear the complete dragon set you will get some experience and learn a level of a spell, but after that there is no benefit it wearing the set together.
The grey potion gives +20 health/mana.
Alchemy GuideHeaven's Gift generates gold, potions and loot. With at least 1 skill point in Alchemy to mix
restoration potions, and level 3 (IIRC) of Heaven's Gift, you should be able to get enough potions to more than make up for the mana used to cast the spell, so given enough time you basically have an unlimited stream of loot.