I am playing on Hard, so my experience is slightly different, but here's what I found:
I was about level 14 by the time I reached the dwarven lands, so level 11 is a bit low.
You should have the first two rage spirits leveled up to about 12 each.
I found many of the fights in the Western Islands to be very hard when I first arrived. I had to go back to Darion and clear pretty much everything out. You can get a lot of gold and xp from the tombs area in Marshan Swamp.
I was able to defeat everything in Darion except for the evil child you described above and the king's tent guard.
A tip: you should make sure you have Scouting level 3 so that you know exactly what you're facing. Hope that helps.
