at that level you should be able to handle most threats now. including that fiends walking around.

what are your stats?

Just hit level 6. My stats are:

STR - 9
WIS - 19
CON - 12
CHR - 13
DEX - 11
INT - 15

As far as fiends go, I've only run into one. I quick saved my game and opened up Moridor's Box to see what would happen and fought the fiend. I won. I also did the same thing with Blackrose (the guy in Alley of Dangerous Angles that wants you kill people) and he killed me in 3 hits. So that's about where I stand at the moment.

Another question: I can't seem to talk to Sharegrave in his house. The chat option comes up, but when I click nothing happens. Any suggestions?

Exit the house and enter again, or if don't work, exit the game and start again, load your saved game. Normally this works for me when I can't talk with a NPC.

I think your stats are good, but what you want to be? Fighter, mage, thief, etc?

Your stats are best for a mage, but the game is easy enough (and stat gains plentiful enough) that you can go into fighter or thief without too much worry.