SureAI

After playing the game for a few hours on adept difficulty, I realised due to lack of latent health regen that the game is harder than vanilla skyrim. But reaching the word of the dead quest at level 8 and being forced to fight 25 enemies with practically no downtime made me wonder whether the game is really meant to be this hard.

Fighting more than about 2 enemies has always been life threatening, but fighting 12 at once with ranged and melee enemies was impossible without godmode, so have I been missing something that makes the game super hard without? I have a feeling it might be meditation, since I can't find any ambrosia to reduce my arcane fever and so haven't done it once...

You seem to have concentrated on the mainquest, if you reached this point at level 8. It is one of the hardest fights in the game, though most players have a higher level when doing this quest. I had level 25, but I guess something higher than 15 would have been sufficient as well.
Your low level could also explain, why you had trouble to find enough ambrosia. You apparently did very little exploring or sidequests, where you could have found enough ambrosia in the loot (alchemists sell it, too, but it is rather expensive).
Arcane Fever has nothing to do with meditating, it is only increased by (found) healing potions and healing spells. If you really managed not to spend any of your memory points, it is surprising that you made it that far at all.

Okay, I figured out what I was doing wrong and spent my learning points which should make some things easier, but to level up further, where might I be able to find easy (one *) side quests to do, the 25-man fight quest was only ** and all the sidequests I've found are *** or **** which would be suicide given my record. Should I also investigate caves that I come across?

Sure, it would be a good idea to check out caves, because you can earn quite a lot of EP (and money, and items...) by killing opponents, and not only by finishing sidequests. Didn't you go in there before, not even out of curiosity? Exploring everything is half the fun of the game, in my opinion, but to each his own.
As to (*) sidequests, the bounty quests from the noticeboard in Riverville should be designed for low level characters. Most (**) quests aren't terribly difficult either, sometimes it just indicates that you would have to walk a bit further to find your destination than that you would encounter stronger enemies.

Agree with Glycerin. Do side quests and bounty quests. The bounty board in the Ark Marketplace contains more quests than the one in Riverville, and I believe starts out with the same low level ones. While doing these, stop in at all the unseen locations along the way and you'll find yourself leveling up pretty quickly.

Quests from the bounty board start out easy and gradually get harder. It's my experience that you can't pick and choose them. You can decline one, but when you go back that same one will be waiting for you. In other words, you have to do them in the order they are offered. In addition to the money reward, there are some nice enchanted weapons you can score from enemies on the more difficult ones. Bring plenty of health potions and Ambrosia, and if you can find a summon wolf, bear, or elemental spell it helps quite a bit if you have enough mana.

Also don't forget that health potions are a bad way to heal yourself and you should only use them out of necessity during fights. It is much cheaper and logistically better to buy good food from the bread merchants in ark and eat that between fights. This also drastically reduces the demand for ambrosia which becomes a pain otherwise.