I got steam version and its updated to the latest version (which apparently is the problem, it breaks stuff)

Yes probably but my game version is good, original retail version, no cd crack, original update to 1.7.

So the savegame you provided is also corrupted. It could have been corrupted by starting the game with a steam buggy version but patching it as you did and then only start the game could have fix it for you. Ok few chance, just my 2 cents. :)

Quest bugs
 

Yes I have seen:
-- the pirate treasure bug jsut mentioned
-- tree of life and orcs can't complete
--Conquest of the town in side the dwarven mining area (starts with a C)

The tree of life one failing is a killer since multiple questions depend on tree of life.
I am steam v1.7