1- hmm how can i describe the mountain of lava when i can't fly. in your initial visit to demonis its a very limited place. direction from portal (the portal that connect to greewort) go right, left, left, straight (past the dragon lair that give you dragon tear) then go up the mountain of lava, at the top of mountain lurf will talk to you.
edit: no its not marked as soon as you reach the top of mountain lurf will talk to you
2- you must talk with granik who live in engineer house, its close to castle in "new kondor" just open your map and you will see it,(underground dwarf city), there may not be any quest marker above the house for this step of polishing iron flower
