You have to scroll the travel map to see Severed Hand. It's a long journey.
The captives on the various levels of Dragon's Eye are sometimes very slow to leave. However, there's nothing more you do with them. You do not meet them back in town (except for Conlon's son) and no one in town will ever mention your rescuing them. I guess they go back to nearby farms, not to the town itself. Likewise, the priestess Egenia does not return to Kuldahar, even though she eventually leaves Dragon's Eye. No idea where she goes, though.
I don't know what you mean about a battle icon. There is an icon that shows up above locations on the travel map, but it's just to indicate where you are, not the state of the area.
And yes, the game does seem to get a bit confused about the neo-orogs. The innkeeper in Kuldahar complains about them throughout the rest of the game, for instance.
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