No, do not encourage Bethesda. This is exaclty what Micro$oft wants.
I understand that, but even after all the vagueness, Bethesda remains the greatest game-company in existence. At least, thats my opinion. Blizzard and Bioware have both disappointed me way more than Bethesda ever did! Microsoft is indeed money-hungry, but I've gotten every single OS very, very cheaply (legally) over the past few years, because of student discounts etc. Didn't pay more than 15 bucks for Win7 for example.
I'm playing on whatever the normal difficulty is. I never changed it, I just fired the game up on Nov 11 and played.
and yes, magic is overpowered.
Magic is overpowered on Normal, but I've long ago switched to Expert, and recently switched to Master. There it is no longer overpowered, the balance is a little off @ Expert/Master imo.
I've found a plethora of mods over the past months to help with that, but I always end up 1. Killing NPC's and almost every mob(Centurions etc) with great ease on my mages but 2. being roasted alive by dragons/deathlords.