Increase magic damage raises your damage on all spells, and also per shot. So each magic missile and each strike from magic blast gets stronger.
You can use items with +[skill name] to raise the level of your skill up to your cap. For instance, if you have 4/5 magic missiles, an item with +1 Magic Missile will raise your skill level to 5/5. You can check your skills book to see your current skill level including any boosts that will be reflected by orange color text. You can also click on the skill and it will display the current stats of your skills with and without the boost.
Evade is a good skill to keep dodge a few attacks. Another good skill if multiple enemies rush you is firewall. It forms a ring of fire around you the burns enemies with fire DOT.
Yes, the game can be confusing at first since its a hybrid RPG and every hybrid out there uses their own system. The best way I found of play the game is to consider it an action/adventure like Tomb Raider or Prince of Persia with an added bonus of being able to spec out your character and weapons.
