Od Nua is supposed to be completely optional (last I heard), and simply a test of skill, ability, and endurance if your party chooses to brave the depths. You wont be forced to tackle the dungeon of doom, it'll just be there, out there, waiting, taunting you with fifteen levels of delicious loot and jaw-dropping scenery*.
But you can certainly pass it by and simply stick to the plot, or craft the perfect sword, or whatever else strikes your fancy. That's the beauty of it!
*Based on the single PE screenshot provided so far.