I am in Cyseal still but have 4675 XP out of 3685 but have not increased level yet. Why have i gone over the level up amount but not levelled?
You have to enter inventory mode on the character for it to level them, from there you can spend your stat/ability points
since you can change difficulty any time I'd suggest changing to hard if you want a challenge. IF you are the type to use tactics rather than just fast battle then it'll be too easy on normal...