I'm in the same situation, at level 4, on normal difficulty. I can't find anywhere I can go, any quests I can do, where I'm not out-leveled. I'm enjoying the game, but it feels like you have to do absolutely every single available quest to get enough xp to level to be able to progress an further with the story quests. And at this point, I'm stumped about what quest I'm missing doing, or what area I can find some creatures my level to fight. It's a bit frustrating.
