I've also forgotten whether Drakensang has adjustable difficulty levels.
I still have the game installed and just checked. It doesn't have adjustable difficulty levels.
With the exception of one fight against (I just put the name of the critter in spoiler tags and nothing else so it's only a light spoiler)...
... I thought that the game was leaning very much towards the easy side of the scales.
Drakensang has an awesome character progression system. In my personal opinion it's actually
the best system that I have ever had the fortune of experiencing in a party-based CRPG.
It offers a very natural progression because you acquire (adventure/experience) points all of the time by defeating enemies and by solving quests. With the exception of special abilities and new abilities that you need to buy from NPC trainers first, you can put your acquired points into any skill or stat at any point while playing. You don't have to seek out a trainer or wait for a level-up. All you need to do is open the stats page and distribute the points that you collected from the last few quests or fights.
Due to the nature of this system you can obviously make adjustments to your character(s) on the fly on an as needed basis. If you keep some points "in the bank" at all times (definitely recommended) then you can easily react to any sort of challenge as you go.
I have definitely not made the best of choices when I developed my characters. As usual I put too much emphasis on "my" (created) character and tried to make her a jack of all trades until I realized that I really needed to spread all of the required skills and abilities across my party.
In spite of the mistakes I made, the game turned out to be fairly easy in the end.
There's always a bit of luck involved as well. The game is based on dice rolls to some extent so if a critical spell misfires at the wrong time or your enemy scores a critical hit at the wrong time then you may have to reload but overall it's a pretty forgiving game. Definitely not on the "epic" side you mentioned. You can waltz right through the game ~95% of the time.