"Arthur repops when we return to the city (he already takes a long time to kill...)"
So it's possible to get rid of Arthur... How do we do it?
I don't know if it's a glitch, but when you leave the city to go into the forest and come back, the guy under the bridge gives you another necklace to sold for $2000 and the bread sells very well each time too. you buy the leather armor and the sword for Lancelot and the cloth for Jaime. You buy lots of potions and you go XP in the forest. I managed to kill him at lvl 4.
We cut off the Arthur flow in the demo so I set Arthus HP to really high so the re-popup wont happen (yes he will in the demo if you beat him since his quest flow was cut), so you have my respect Solymas and Djyemee xD The guys under the bridge always gives you a new necklace if you sold the old one.