In older versions it was possible to kill the fairy and make the sorcerer's potion to get access to magic early in order to proceed, but now that you need magic in order to actually make the potion, yeah that's pretty much as much as you can do on that route in the demo. There's just too much power locked behind sparing the fairy.
Personally, I think it could probably be fixed by allowing us to break down the door at any point of the sage quest rather than just the start (or just being allowed to climb the mountain without being prompted by the sage first). That way we could still get the power from the yetis.