So, first off, the levers in Dragoon's Caverns was my fault. It actually was the second level I'd ever designed, but I learned a lot from those early levels. (from JVC himself: "Never have a lever puzzle where the player can't immediately see the results of pulling a lever"). Some great advice there, and you can see me taking it to heart in the MM7 sewers (where you pull the levers o align the walking stones to get to the thief chief.)As far as Might and Magic vs. Oblivion, there are a lot of obvious similaritys, and major differences. to answer your question Bones, Yes we did talk about adaptive monster levels. We chose not to go that route because I think a lot of the fun of gaining levels is going back to places you used to get your arse kicked and slaughter everything with little to no effort. With adaptive enemies, on one hand you always have an appropriate level of challege, but on the other hand, you never really feel like your getting more powerful. With Oblivion, I'm barely past level 4 and haven't faced any serious challenges. I've talked to other people who are higher levels who are constantly getting slaughtered in the same areas I skate through.
Even though it seems contradictory, adaptive monsters are harder to balance because of those same problems, and actually it's quite a technical challenge. Might and Magic had adaptive monsters in the Arenas, and sometimes those monsters were either not challenging enough, or too challenging.
As far as party or single hero, I've never really had an opinion on which was better. They both have their merits, and I've often thought that single hero is better suited to first person than a party. (If only you knew the struggles we went through with that in the early design of MM9)