Yes, you can choose to do no quests between the time you return the dwarves and the time you have to choose a new arbiter. Instead, in this minimalist challenge, you'll sit around for like 6 months of game time twiddling your thumbs.

On the bright side, sleeping in your castle doesn't cost any food.

There is really a person that looks for special challenges in M&M 7?
I`m not even able to solve the first dungeon in this game, because the monsters in there are so fucking overpowered, and there is a guy that seeks extra challenges.

Are you referring to the Temple of the Moon, the Dragon Cave, or the Castle in Harmondale?

Temple of Moon, of course.

If you're struggling with killing enemies the simplest way to make it easier is to fight in turn based combat. Also try to fight enemies one at a time. Go slow and you will quickly pick up the ways to improve and then have an overpowered party which can steam roll over anyone.

Did you hit the "Globe." (Top of the hill, near the Guards that wonder how to make a potion). That will help you. Then go to the Challenge Pedestal (Blue Fire). Use the Skill points to up your players. Between the "Day of the gods" Globe and additional skill points, you shouldn't have too difficult a time.

Although I killed all Dragonflies on the island, I don`t have enuff XP to level up.
Are the monsters respawning?

You should be able to get to level 4 on a basic skill before leaving the Island. 1) the Challenge Pedestal 2) finding the contestants (quest points) in the Dragon Cave; Dragon Flies (they sometime do respawn, but in dwindling numbers); 3) the Temple Cave. If I remember correctly, before you Board the ship you can get to Level 4 with those challenges. But the Island can be cleared with the Globe and the Challenge Pedestal only.
(Some can defeat the Dragon in the Cave. I've never been able to do it.)


Additional Help but a Spoiler
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There is a guy who offers you a wand. Most attract the fireflies to the upper level, they wipe out the guy (and some others, oops) and you can take it off his corpse. Stand next to him so he doesn't run from the threat.
Or you can accept it and deal with the bargain later.
The wand is a fireball wand which is very useful in early quests.

The dragonflies do will respawn. You have to make sure to kill every single one, (Make sure they don't run away over the water) and they will be back after you sleep through the night. You could also kill the dragon if you wanted. He gives you a good amount of xp and usually a pretty good item. It's a lot easier than it would seem. Just run around in circles shooting him. Having a wand or two will really speed it up. With enough patience he will go down.

Pretty much this.

Once a week or so, you'll need to sleep twice before the dragonflies respawn.

If you go after the dragon, then use the Day of the Gods pedestal and the Fire resistance pedestal first. I think there is also a Fire Resistance well that will give you a temporary boost. I wouldn't use the Haste pedestal for the dragon, because it WILL wear off before the fighting is over, and then you'll have the weak condition. Having to run and shoot means you won't really get any benefit from Haste anyway.

Also, Bows are incredibly helpful. You can go into Turn based mode, shoot, and then turn around to run away from enemies when you get your movement, turn back to shoot, turn to run. Most of them can be pretty effectively kited in this fashion while you lead them in circles or whatever. Except for the dragon; the dragon hits too hard to fight it in real time.