After a long time, I have finally managed to complete the story. I had decided to go with the magi dagger-can't spell the actual name for my life- with wind magic. The main strategy is to switch between physical and magic attacks to build up damage, while also using channels and traits to drastically increase my initiative and glancing hit chance. Not sure if I should focus on mastering wind magic or branch out to different magic.
Congrats on beating it so far! And the spell dagger is an Athame. Depends on your playstyle a bit, Bloodflame Blade is a good fire element Athame skill, but you can also use normal dagger skills or another element to mess around. I'd look into Kovomancy if you haven't already, it has some nice bleed synergy.
I was tempted to take Kovomancy, but most of them require focus to deal full damage and I'm focus on three stats: Dexterity, Agility, and Magic. So Kovomancy isn't an option for me. Although considering the fact that elemental resistance is now a thing in this version, perhaps branching to other types of magic might be the right call.