Nope, nobody reacts if you plunder their homes. I suppose it has something to do with what you do for a living.
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I have to agree that combat can be tough. As long as it doesn't get ridiculously hard, however, I find it a welcome change from many games where you are never really in danger unless you do something stupid.
A bow and a zombie sounds like a promising build to support you magic at lower levels. I use that combination to support my main battle tactic, which is two-weapon fighting. As long as you have the space to move around, you should be able to pick off your opposition one at a time.
If you want to take down your enemies with magic, you might consider supporting your basic magic attack with Charm. It can totally turn a sticky situation around, since it temporarily takes care of two or more enemies in one go - they end up fighting each other. According to those who know the game better than I do, Charm becomes less useful at higher levels since many powerful entities are immune, but by then you should be able to re-train.
Hide in Shadows is a magicky way to escape if your enemies manage to close in on you. It can be quite neat even with just one point put into it.
