You can spend the night at the tavern: The Soaring Griffin. It's over there (points to where), and there's also the tavern: The Holy Grail. (It's more comfortable there, points to where).
The Imperial Palace is located in the Imperial City. The Imperial City is the heart of the world; you need to go northwest. When you leave the city, there will be a road, then a fork. See the signpost. But you can also hire a carriage to the Imperial City; it's more comfortable and faster, the price is 10 silver. A lot is happening on the mainland. The Emperor has disappeared... The Brotherhood of Darkness has appeared, the roads are unsafe, and rumors are spreading about the appearance of demons and necromancers. Paladins patrol the roads, but there are few of them. The search for the Emperor is underway... But they can tell you more in the Imperial City; I don't know much.