1. In versions 1.0.3 and 1.0.4, you can enter the city with the main hero, but not with a secondary hero, because he is cursed. In 1.05, I'm sure it's the same.

Where did you get the teleportation spell?

It wasn't possible to enter the city with the main hero. I was playing as Necromancers, and sometimes, even when entering a building for a quest, they would try to say that the hero is cursed, but this is very rare. When you look at the quests and press cancel, the quests are still given without any problems. I don't consider this a bug. And the fact that you couldn't enter the city was a bug if it has been fixed. :)
Astral Gates are given in the 5th building for completing one of the quests.