Wow! Thanks for the great YouTube playthrough and review! Your questions and suggestions are super-helpful for v0.06 (I'll probably upload it in the next few days). Your observation about the +1 attack level-up and the longsword +1 attack stacking to auto-hit 3-point monsters really caught my attention- I totally missed that.
Amusingly, in my own playtests I have literally never had a character survive long enough to return to the forest from the barrow/keep Dark Fort detours, so the question of how to deal with the level points never came up.