I got to level 4 even before the hag. I just went north to kill the gnolls and it was enough to get my level. I agree it is slightly too fast. It would make certain combats more interesting if we didn't get to level 4 mid act 1.
I would probably use a party of 4 if it was slower to level up honestly. At the moment, I only use 2 characters in my party to keep combat interesting. If not, battles are just boring slaughters.