I have the part that you get from the snake when you kill him. Whare is the second part?

what would have happened if I gave him the necklas that he wanted?

Ware should i go after the battle with all the skelation and the mage, up or down?

Second Part of Wizard's Torc you'll get when you finish the dwarven dungeons, so don't worry.

Go up. Some parts of Deep Halls are a bit hard so you'll pump up your NPC(s) in Stone Halls then you'll return to Deep Halls.