Quest items taking inventory space is just bad design. There's no way to defend it and if we want a more realistic approach then we shouldn't have stuff like storage shared between containers either.
Anyway combat isn't looking that great, seems to lack that punch and a clear message you're doing a good job at weakening the monster you're attacking. The rest is looking good. It's definitely not going to be a blind purchase in this case, but I'll have it on my radar and wait for real impressions from people playing the final build.