It's probably easiest to pick the old man for your first fight- you defeat him by grappling him (first option) and then by ignoring the panther he conjures (first option again).
Also, if you go to get weapons for the escape, hang back and when your partner climbs out of the pit, take the sword. If you take the emerald you get a first class ticket- this is not what you want.
When the patrol comes through the corridoor later, avoid them, then go into the room and search the bookshelf and the bed (a magic construct pops up out of the nightstand and attacks you if you search the nightstand first, of the other guy if you search the bed or bookshelf first)- the bookshelf contains a spellbook (only identified by the witch if you don't take the emerald) and the bed contains 10 gold coins.
After you complete the witches quests (not detailing here, this is a hint for how to become a mage) if you kill the old man you will have a green stone- she will identify this as a mages(or some variant) gem and will offer to teach you 2 spells. Choose which ones you want- the best are probably the fire spell and the one to get rid of spectres, you will need both later- and you will learn the other two and learn a fifth spell.
This is basically how to acquire all the magic in the game, good luck!