Thanks for the replies guys - I hadn't realised that the cap was at level 4. I usually try to handle tricky combats by levelling up a bit - at least I know that doing so isn't an option here.
Grinding: there were plenty of fights I couldn't manage before levelling up to level 4 (and getting some nicer loot, not that there's too much of that going around).
I was very worried about character options, as I'm not a fan of the current options, and the tiefling the paladins of Tyr sent me after is apparently another one and she doesn't come across as being a saint.
Thanks for the tip regarding inventory sorting - I'll take another look for that button.