I've just finished the game, so I'm willing to share the lessons learned from character development. Minor spoilers included.
I was playing as a mixed-class, priest-warrior character on hard difficulty level. I had no offensive magic except firewall, but made extensive use of several spells: healing, charm, blindness, summon demon. In the early game, I used the bow a lot, but gradually switched to dual-wielding melee weapons.
I feel it's best to separate the early and later game development strategies, as they are quite different.
1. Early game development.
- start off with investing skill points into wisdom, mind reading and lockpicking. The former two to gain more XP (also keep an eye on all items that increase wisdom), the latter to open chests with goodies. Lockpicking level 4 opened all chests I found till pretty late in the game. Gradually invest points into Encumbrance (which is useful only in the early game) as you need them, but don't hesitate to sell weapons or armor that you don't need, as you'll find plenty more with exception of set items (*SPOILER* I only used three sets during the game: Wild Dwellers, Archmage and Ulthring, everything else turned out to be useless *SPOILER*).
- as you are very vulnerable during this time, and DKS *loves* ranger opponents, invest stat points into dexterity (boosts ranged defense and attack) and skill points into ranged attack. I invested a single point into poisoned arrows, which have the useful properties of stunning the enemy for a second and guiding themselves at the enemy even if they move. The best strategy for me was luring away opponents one-by-one and killing them from distance. As I said, many opponents use ranged attacks, but during early game projectiles fly slowly, and no one has instant-hit magic, so with some practice you can avoid taking too much damage. Dodge the projectiles by strafe movement and run away with jumping (this way you move faster). By the way, the fastest way of movement is strafe rolling (left/right + space), but obviously it's not very convenient

- every time you get a quest reward choice, pick XP. Faster leveling is more important in the long term than any item you can get (which usually aren't that great in quest rewards, anyway). YMMV.
2. Later game development. I'm not sure how useful this will be, because I'm the kind of RPG players, who must explore every area in the game, finish every side quest and talk to every NPC. This means that I gathered much more experience on the side quests before moving on to the next stage of the main quest than most players. But I guess some of the lessons I learned would be still useful to them.
- as I didn't want to waste resources, I never enchanted or used any charms on weapons or armor until before the final stage of the game. It turned out that enchantment resources (except for the highest-level and healing enchantments) are nearly free in the late game, so whenever you find an armor or weapon that you think you're likely to use for a while, enchant it. Also, low-level charms become worthless in the late game, so use them too. This should make the early game a much more pleasant experience.
- on contrary to what some people write here on the forums, I found melee fighting to be increasingly powerful, and game if not increasingly easy, then at the same complexity, at least in combination with the few spells that I did pick. Considering I never used enchantments and almost didn't use potions, it means that the game is indeed well-balanced and quite approachable at the hard level even without extensive side questing. I can't say I never died, but the reason for death was usually impatience (e.g., landing into the crowd of the enemies and trying to kick all their asses at once doesn't always work).
- before entering the endgame area, I did full optimization of the character, including enchanting all items, which made my character absolutely unmatched, and the endgame battle turned out to be a piece of cake
- on contrary to what some people write, I found the charm spell to be useful during all the game, including in boss fights. Depending on the level of the enemy and of your charm spell (and perhaps resistances), it doesn't always work, but usually it does from 2nd or 3rd attempt. It doesn't work on bosses, but it doesn't need to: you always have some other enemies around a boss, and you can charm them instead. I finished the game with level 5 charm.
- due to my mixed class, I distributed the stat points nearly evenly: x to vitality, spirit and intelligence, 0.7x to dexterity and 1.5x to strength
Battle tactics:
- I used my pet and a summoned demon to provide enemies some distraction, but it didn't work very well, as they still preferred targeting me every time they got a chance. The damage that these allies are capable of doing is also pretty disappointing. Charming an opponent, however, works pretty well. I either charmed the toughest warrior from the pack, or a healer (or both). As opposed to your Heal spell (which can only heal yourself), healers have the ability to heal you and your allies, which is invaluable when there are many enemies with stun attacks.
- the Blind skill is pretty useful even despite its long recharge time. I either used it on the toughest enemy, or on one of the archers sitting somewhere out of reach
- my main offensive skills were Thousand Strikes (9th at the endgame) and Whirlwind (10th). I often followed them up with a Firewall (5th). I tried using Heal and not potions, but as Charm, Thousand Strikes and Heal require a lot of mana, I usually ran out of it pretty fast.
Skills:
- I didn't pick the Mana Efficiency skill up until the late game, and it was one of my main mistakes. This skill is a must! At 7th level it reduces the cost of all skills and spells by 60%. 7th level was good enough for me to avoid running out of mana during the final fight.
- I didn't invest anything into the Expert (weaponry) skills until the endgame, and I'm not sure it was wrong, as you need to pour a lot of points into these skills to get anywhere.
- There are a number of skills that grant you significant bonuses with a single point investment, but further progress costs a lot of points. I made sure to have a single point in each of those: Summon Mastery, Life Tap, Destruction, Life Leech, Regenerate, Bleed, Reflect, Evade (I didn't actually invest points into each of them: some skill points came from weapons/armor/jewelry).
I didn't employ any cheating (such as reloading the game repeatedly to get a better loot out of a chest) throughout the game, and still finished with good stuff on me and lots of money to spare (except for that damned Orobas chest, which simply calls for it

I can tell from experience that cheating is absolutely not required to succeed, and it just counters enjoyment.