I have heard several people comment that neither of these characters can progress very far as spellcasters.

Why is this? Is there something that artifically limits their level advancement?

There's nothing wrong with Nalia. She effectively a perfectly good generic mage.

Completely ignore her theiving (non)skills. The only thing that matters relative to her having started as a thief is that it gives Nalia the ability to use a short bow. Nalia spent a grand and glorious total of 5000 XP to effectively gain this ability. This in no way prevents Nalia from reaching the XP cap of 2.95 million.

Since Nalia is "only" a generic mage, she cannot match the number of spells per level as Edwin, a specialist mage. That's a given. But, if you're looking for a capable mage with a good alignment, there's nothing wrong with Nalia.

On the other hand, Imoen's ability to progress is limited by the plotline and I'll just leave it at that.

Ok that makes sense.

Nalia sucks as a character in general. She whines too much.

What my current solution was to run a multiplayer game. I imported two characters, once was my main character the other was my 8th level mage specialist conjuror. It really sucked though that he lost his great spellbook and had to rechoose his spells.

Imoen and Nalia are both whiners. They both have problems
with their thieving skill's. I have finished the game with
them both and in the end Imoen was better, she got a couple
of extra spell's, bhaal blood perhaps. But i would not
recommend either of them if you want a good spellcaster
choose Edwin, if you need a combined thief/mage. Imoen is
a bit better rate 65% Nalia 60%....

Aegis,

"Too much too soon, too late"

you're crazy! Jan Jannsen is the best!

Jan is great. The problem with him is that he is multi-class. If you are not using an experiecs cheat, he will only get so high in mage levels. Nalia is useless as a thief but is a pretty decent mage. Apart from Edwin, Imoen is probably the best. How high she progresses, however, is entirely dependent on when one does the critical path (rescue Imoen). I'm doing the critical path early in my current game, and look forward to a more powerful Imoen this game.

You'll take Imoen with you, she will easily level up to 17 in the end of the game(chap 6/7).