That was enlightening. I spent some time playing the game because I usualy feel bad about saying something I don't have much of an idea about so here are some revised thoughts.
Gave three tries to hard difficulty and gave up. With no bow, I pretty much had to trade blows with all enemies, which quickly lead to my death. It might be doable with enemies taking more time for first attack, but right now, you just have to get in there, slash and hope for the best.
Normal run went in oposite direction. I quickly found a wand and It turned in a cakewalk. Together with a life steal ring, I became almost unstopable. However, I was still using mainly my club and shield. Life steal with high armor was just too good.
This highlighted another problem. Without the bow, the first level is really boring since you can only attack in melee and have no ranged weapons or spells. Kiting with melee is almost impossible now, since enemies usualy smack you as soon as they reach you. So like I said above, get in their face and slash, chug potions if in danger and hope for the best. This also doubly hurts when you are unlucky and get no ranged weapon after the cauldron. Flaming skulls are now really nasty in melee.
Like you said, choosing a starting weapon would be nice. Being able to pick two weapons from all possible weapon types should be allowed too, since this will make the most boring part (first level), quite different on every playthough. There are a lot of weapon combinations already in the game with all the weapon types. And I would like to use a spear too because I usualy find them way too late when I already have my build focused around something different.
As for balancing ranged vs melee, my idea would be to make ranged weapons good againts single, strong oponents while melee againts crowds. With faster enemy reactions and speed, kiting is harder. But melee is also harder. Give melee weapons inherent splash / cleave attack and they will be both more fun and they will have one advantage compared to bows (excluding that vedge arrow weapon art).
As for my questions, everything sounds good. The game is still in development after all so there is a lot that could change.
Also, did you try experimenting with using prerendered 3D model images for item icons? You can get some nice results with much less efford than drawing them by hand. Put some filter on them or run them through an AI. Who knows, it might be usable.
And lastly, one bug report. I had scimitar and shield in slot one and wand and fetish in slot two. Wand gave +2 to my agility, totaling at 13. When I switched from wand to scimitar, the scimitar got droped down. When I picked it up, I equiped it instantly since my agi was 11, exatly what the wapon needed. However, my attacks were lowered. If I kept switching, the damage got into negatives.
Loading a save fixed the numbers being in negatives, but switching the loadouts still droped the sword and picking it and switching again lowered my damage again.