Hi, welcome to the forum

. Let's see if I can give some advice and responses to your queries...
In case you aren't aware, it's possible to use the keyboard as well as the mouse, in case you've been just clicking everything. The top or bottom (I forget) six buttons of the numpad map to the directional buttons so you can use those to move around which frees up the cursor for speedier clicking on things in the view window. You can also use number keys in place of clicking on spell runes if you like (numbers 1-6, naturally

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I don't recall any way to put items in a character's inventory without opening it. Note that if you just right-click with the cursor in a random place on the screen (but not over a character portrait), you will go to the inventory screen of whichever character's name is currently highlighted in yellow - this is the party leader and it's also their hand you're using in the main view, so if you pick up and chuck items there it will be that character wh gains Ninja exp for doing so. You can change the leader at any time by clicking on a different character's name.
And yes, you do have to individually pick up every item from a pile on the floor - item stacks and such-like hadn't been invented yet when this game came out

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On "casting spells and fighting at the same time", you know you can prepare spells in advance? Get everyone with a Fireball lined up and ready to go, rest a bit to regain the mana, and then you can quickly boom-boom-boom-boom lob all four Fireballs at once when you next run into something nasty

. Otherwise it's just a matter of manoeuvring around and speed-clicking to fight stuff - you don't have to just stand in one place and tank everything and in fact doing so is probably a bad idea if you're facing something that hits really hard

. The "step-dance", or whatever you want to call it, is a common tactic amongst experienced players when facing a single creature (or a group clustered together such that they only take up one square) - get into an area that is at least a 2x2 square, have themonster come toward you, hit them and immediately sidestep, then turn to face the square you just left. The monster(s) will step into that square, so you can hit them in the side, then sidestep-and-turn again before they get a chance to whack you in return. Repeat until they are dead at pretty much zero threat to yourself unless something else sneaks up on you

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The "DM Rules" setting, as far as I remember, affects one main thing in CSBWin - as you can probably guess from the name, CSBWin was made from CSB first and then DM was added in as well or something, so the base engine is CSB. Not really all that different from DM except that if/when you recruit champions from a mirror, they take a hit to their max hp or something. Turning on "DM Rules" prevents this from happening and so stops you from having an inadvertent disadvantage in the game. I think that's the only difference so once you've recruited your party it should be okay. But I always turn it on anyway. Just in case

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Note that DM is basically "tutorial mode" compared to CSB so it generally takes things pretty easy on you for the first couple of levels or so, after which it starts to ramp up. But still nowhere near to the point of most of CSB

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