Did you try manually setting the resolution for D2:ED? I don't recall any particular problems the game had with certain resolutions. Someone did mention that running the game as administrator in Vista/7 got some higher resolutions to show up in the game's options.
What issue do you have with the difficulty levels? If it starts getting too easy you can always pick a handicap (stop assigning stat or skill points, don't use certain pieces of equipment, etc).
A difficulty jump generally means there are other places you need to explore first or other things you need to finish off.
Magic and ranged attacks home in to an extent (reduced in the 1.03 patch / North American release), yours and those of NPCs. The alternative would be some form of manual aiming to lead moving targets, or else ranged characters would not be viable.
In human form if you are a moderate distance away it is fairly easy to avoid ranged attacks, and in dragon form it is very easy.
Collision detection can be a problem (particularly when using Rush Attack either up or down hill), but it is still relatively rare (happened to me about 3 times playing a warrior that frequently Rush Attacked), and can be easily recovered from if you make periodic saves (in one case I was able to run in the downhill direction and popped back above ground).
I easily beat the Memory Eaters in the Hall of Echoes. In fact, at level 36 they could not do any significant damage to me. The first time I went through there I did a lot of unnecessary dodging and flying around, since I thought (from the first description of the Memory Eaters on the Divinity 2 website) the circular attacks might deduct experience points, rather than hit points. Later I tested that, and found I could sit in the middle of a group of them, with one occasionally casting Dragon Sphere, and not take any damage.
Even people entering the Hall of Echoes in the low thirties have been able to take out the Memory Eaters, and one person reported finishing the game at level 26 (with a tactic of running, jumping and madly casting Magic Missile and Firewall).
