1. I was at about this point when I entered Stormfist castle, and did not have any problems with that part of the game. There is no area around Verdistis, at least that you are suppose to be able to get to. There is a way you can get outside (tossing a teleporter stone to the other side of the wall around the city entrance) and see locations from quests taken out of the game.
2. No, there is no quest.
3. The cave with the sword of chaos? No quest, just the sword, and maybe a spell book, IIRC.
4. After you find the first piece you can ask a couple people about it; I don't think it is mentioned before that.
After entering the castle and making your way through the next area, you get a quest to save Zandalor. Do so to get your teleporter stones back. You can go to the Dark Forest first if you wish, but that will not greatly shorten the time you are without the teleporter stones. I don't think there are any quests associated with the Verdistis sewers, though there are a couple interesting things to find.
5. You will meet him again, in the Dark Forest; you don't get a chance to attack him in your first meeting.
