Does intel increase spell damage, or does it just increase mana, stam and MR like the tooltip suggests? Also how many blasted levels are there in the Iron Mines, I'm at Orc Level 2.

Afaik only the skill level of the respective magic skill matters for spell damage. But each spell scales differently. This post here explains a few things - http://www.gog.com/en/forum/inquisitor/how_to_build_a_priest_in_hard_mode/post12

I honestly lost count on how many levels there are in the mines. It is quite daunting.