I read somewhere that there's a certain level that resets on exiting, allowing for some XP farming (until the quest is complete or the level difference becomes too big). Anyone knows where it might be?

I don't recall XP farming in DD either. I would go Orc / Troll hunting to gain XP.

There are some stone commemorates ( ( See # 20) scattered around but I don't recall any method to respawn the critters in DD.

Some folks used resurrection but it was tedious to say the least ( ( See Raze's post here )

Try Scared Gold if you like re-spawn as it is constant in that game . . . =)