a) Story is the continuation of Divine Divinity & Beyond Divinity, and is passable. It's mostly told through short cutscenes at certain pivotal moments in the game. Dialogue is well written and generally well voiced.
b) Character development is completely free in the game. Each level up you get 4 stat points & 1 skill point to distribute. If you want to do some magic, you put points in magic skills. Using skills consumes a certain amount of mana (the amount of which depends on Spirit stat & equipment).
c) If you can run Dragon Age, you shouldn't have problems with this one. It isn't the best optimized game, though - uses Gamebryo like FO3. But there's a new patch coming out soon.