Can there be only one current quest in MM1?

It's never mentioned explicitly in the manual, it just says that you may "abandon" a quest and you'll lose XP in this case. There's even a special spell to release you from a quest and thus prevent XP loss. But how can you abandon a quest? The only possibility seems to be to accept another quest while you're on one. Is this how it works?

Thanks!

I think there is a spell to make you forget some of the quests, like the fetch quests the lords send you on.

Yes, that "Remove Quest" spell had me a bit confused too when I first read it in the manual. As I said, it applies only to Lords in castles. You'll recognize them when you see them, and by that time you'll have much more experience and the "Remove Quest" spell too. So don't worry about taking any quests, you can't go wrong.

In fact, part of the charm of this game is "try everything". Worst case, you'll die and restart in an inn. Lots of very tough areas are available from the very start, and you can't tell how difficult it is till you try it. Just make sure you do save to an inn, when you get a really cool item... etc.
The only way you can screw up your game is if you save (enter an inn) while one of the characters is dead with a low level party. At later levels it will not be a problem because you'll have the spells to raise them, or enough gold to pay for it.

I only played this game several years ago too, and was surprised at the amount of resources available for such an old game.