1. If you didn't talk about George with the vampire, your character doesn't know that he was the killer and why George was killed. Possible fix; FIX for broken Imp Council Member quest

2. Have the healers already moved to the inn? If so, you are too late. You need to talk to general Alix at the Barracks.

3. Have you been to the castle yet? Got kicked out? Got the quest to rescue Zandalor?

4. Yes, it does. The special function is to drain your stamina when in your inventory.