As the questions above I cant answer that because I'm skipping quite a lot of side quests and proceed to main quest.

I only can answer 1 question: No, the quest is not timed, you can freely take your time to explore.

Act 2 means you're at Driftwood right? If I'm not wrong remembering it, you need to awake your Godwoken power. Go to the Meistr Siva's house (house on the north side of the village) and talk to Elizabeth.

[Linked Image]

Then you found out that Meistr Siva is out, so you need to go to east side of Driftwood, after you out of village go little bit to north, find lizard that is being captive by magisters, help her, battle with those 2 magisters, and the story continues.