Here's a question: when creating an area spell, how big should the area be? I am worried that an area too big might cause issues when the spell is used near a town.

I am thinking of two area spells I want to make:
1. Absorb Health in order to deal with larger groups of enemies
2. Levitate 1 second to force Cliff Racers to fall (should this one be Target or Touch?)

I have encountered 3 Cliff Racers to fall, and their plums are nice to sell early when money is scarce.

The only time I've ever used an area of effect larger than 10 I went for 50, just experimenting with making a powerful open lock item. It would certainly open entire rooms full of locks all at once, giving you a message for each. You wouldn't want anybody to see you casting it, obviously. For combat effects generally an area of 10 is enough to hit multiple enemies in indoor zones... outdoor... I could see doubling it and still only rarely getting to hit two foes at once. Can you hit yourself with area attacks? It's been a while since I even tried an area attack. (The frivously powerful unlocking ring was more recent, though.)

An area of 2-3 is sufficient if you just want to be able to aim at the ground rather than your foe when casting. 1 might give you an annoying miss rate if you're not a seasoned first-person gamer (no shame - I'm not).