Neverwinter Nights.

In Neverwinter Nights, you'll take a tour through the entire Forgotten Realms, as you adventure across an entire continent to become a skilled and mighty warrior! This game combines the hack-and-slash of Dungeon Siege and the complex character management of Baldur's Gate 2 into a very enjoyable game. The gameplay focuses on a single character; while there is no party system you can hire a henchman (a la Diablo 2) that can be useful.

The story line is detailed and interesting. Many, many NPCs to interact with. No "ultra-impossible" enemies: while the game allows you to examine an enemy and determine their challenge rating, I found that even ones labeled as "Impossible" by the game were not particularly difficult for my fighter to dispatch.