1) In my opinion. Armored Princess is only difficult in the beginning. Namely, until you reach 20+ level, defeat Hagni, get Pegasus, and with some luck, steal maps for all islands, then you go gathering goods, completing free quests for lots of exp., and from there the game gets only easier. Only Bosses and high level heroes can provide a challenge. Off course, I'm talking about impossible difficulty here, lower difficulties are always easy.
2) I don't know about you, but editing terrain on my editor is impossible. after 10-20 seconds of applying textures, or leveling terrain editor inevitably crashes. I have multiple games installed, and it's the same on all of them. Not sure what causes this problem, but there are no crashes when I try to do the same on other computers. And even before this issue has arisen, I remember that the editor was buggy and hard to work with.
Beside these issues, editor is quite useful for other stuff.
3) I am not currently working on newer version, but I might release it in the future. I thought about using exp system from RS, but I don't know which files should I copy for it to not cause any bugs.