I remember playing this game many years ago and enjoying it quite a bit. I always wanted to play as a mage, but then I would have to give up on that and switch to weapons. Is there a way to make magic viable in combat? If so, what am I missing?
As far I know spells do not scale with your Arcane. You do get +25% Spell Damage at max Arcane, but spell damage is capped at 100% anyway so you pretty much just save enchantment slots. Max you can get is 100% spell damage.
On the other hand (!) Unarmed gets a boost from Physique (+20%
base damage at "Herculean"). That means 120% damage when maxed.
Example: Slam. A lev. 50 character with all stats maxed will do 40+132= 172 max damage. Make the character Soldier -> 244 damage in 1st turn for 25 aura (for crit it have to be the only action used). 500% crit -> 1220 phys dmg.
Same character with a legendary demonstone will do 40+143=183 max damage, and for crit you have to use it 3 times. Again, Soldier -> 366 dmg in 1st turn. x3 for crit -> 366+366+ (500% crit) 1830 -> 2562 phys dmg.
However there are 2 spells I like: Soothing Waters and Lilith's Command. A heal and a panic button.
I play on Lilith difficulty (enemy 2x level, they deliver 400% dmg, they receive 25% dmg) so when they manage to hit my PC, it's... not nice. You don't want the combat to last too many rounds at that difficulty. A level 100 greater succubus have 580-600 hp and 100% lust damage. (And btw, 500+ shielding does nothing against "magazine dump" or against other skills that get past shielding. My PC took 13k+ dmg from an enforcer in Sword Warehouse during Teleporter Quest at max shielding).
Back to your question: in my opinion, unless you have masochistic tendencies maybe you should use spells as support, not as main weapon.