The Hero's Path

In my opinion, the alchemy bonuses need to be toned down somehow – perhaps by introducing a limit on their use.

I had similar thoughts when testing, but I didn't get around to implementing it at the time. Something like reducing the effectiveness of potions consumed in quick succession – each subsequent potion provides less and less benefit. And the same applies to rune magic.

The most difficult battle is breaking through the swarm of jumping demons on the road to the elven city.

Have you tried alternative routes? There seem to be skeletons near the Great Tree, and if you defeat them, or the executioners a little earlier, you can bypass the Thieves' Guild from the south and reach Winded.