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Can't help you with the Ilmater-guy, as I don't remember it in the game (it's been a while since I played), but there is no specific order in which you need to do those optional quests and locations you mention. One thing is, if you do some of them too soon, at a low level, you might end up dead, but that's all. Just do them when you feel ready for them, and you'll be OK. Only that cursed sword, you need to be in possession of certain items to get it which you won't have if you do those quests in a "logical" order, i.e. easier ones before harder ones. But since the sword is really terribly cursed, and utterly crap in combat, you don't need it ayway, so IMHO missing it isn't a problem at all.
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