When this discussion came up awhile ago, I suggested important NPCs could be highlighted in a manner that fit more into the gameworld, such as an aura around them or a rune on the ground at their feet. I'd have to play the game for awhile to see if these markers would bother me, or if I'd just get used to and ignore them.
There is no mouse cursor except in the inventory screen, so there needs to be some kind of marker during combat, though I don't know if an arrow would have been my first choice...
