[s]We're all dead IRL. We can't leave because we're literal ghosts in the machine. When you die in game, it's actually your 'soul' getting wiped.[/s]

That is a joke suggestion. Unless you don't want it to be.

...I'll try to think up something to solve the magic dilemma...

I [i]want[/i] to suggest a kind of perk/feat system similar to the Elder Scrolls or Fallout, but I have no idea how I'd manage that so I suppose I won't be doing it.