I like the way it is done in Divine Divinety: You talk to Bob and he tells you to kill some wolfes in a cave to the north (just an example, I dont remember names and quests from there). In your quest log log appears a note: "Bob wants me to kill some wolfes in a cave north of his house." I have a map and I can make markers on the map. In this case I would make a marker at Bobs house "Bob, kill wolves cave north". No markers or anything. Great feeling of exploration.
Of course, the quest log must be well organized. A think that it was not always perfect in D:OS1. Right now I play DA:O again and I like this: Quest are sorted by area and they are divided in open and solved quests. I do not want a diary where things are written in the order how I find them and different quest status is shown by different text color (I think it was like this in DD, it was hard to find a specific quest, especially if you started it a long time ago).
Divinity2 was a fun game, but the ! and ? over peoples heads felt immersion breaking for me. And I defenitely do not want an arrow that shows me the way. If you add those things, please give us the option to turn off quest markers.
This is something I have learned from the elder scrolls (I am sure for Morrowind, not so sure about the rest): Please give every char a name, not just commoner, merchant or noble. In most games I press tab and I only talk to chars with a name because only they are relevant for quests. I think it feels immersion breaking if only 10% of the people have normal names while the rest had names that just describe their job or status. In TES only 10% of the people had a quest for you too while the rest said some usual lines, but you did not know until you talked to them. In Morrowind even normal bandits in a dungeon had names and when fighting them I was thinking if I could have talked to them if I did things different before. Yes, this does make it harder to find out who has a quest for you, but Morrowind was on of the most immersive game worlds ever, even if the gameplay was very repetitive (walk a lot, click things to death, jump and run like crazy just to increase your skill)
I started computer gaming with realms of arcadia 3 in 1995, so I am used to being lost on a giant map without having much direction.

Prof. Dr. Dr. Mad S. Tist

World leading expert of artificial stupidity.
Because there are too many people who work on artificial intelligence already