First off.... Alliva, how do you know there is no magic? ;-)
And now to the point...
Magic, based on its rules, technically should not be able to go through walls. Well, aside from by destroying the wall of course. Firstly, for magic to work correctly you have to know where to aim/cast, and unless you can see through walls, not really gonna be able to see the target. Secondly, the energy, if it passed through solids, would pass through your target as well. Saying it will only work on living things is total crap for projectile spells at least.
Magic should be very hard to learn and should take a long time. It should be very weak at first, but quickly get stronger. I saw some magic wand things in the PS art folder I think. Perhaps these can be made to help with different things...? Such as accuracy, strength, etc. And maybe separate ones for separate ways. Dunno, bout that part, but it is a possibility.
Also, training magic and intelligence should decrease combat skills and stats. Which also goes the other way around. Related but slightly off topic, the same should go within the combat stats. Training strength should limit your agility. I mean, big muscular guys are not going to be as on balance and quick moving, nor quite as mobile. I mean, take Arnold for example. In Conan the Barbarian I think it was, he had to lose muscle mass to hold the sword above his head

The main problem seems to be getting PP for training magic. Maybe the PP requirements should be lowered very greatly, or taken away completely for magic, at least until higher levels. Money is easily taken care of by RPing the 'master and apprentice' thing. The master would be much more powerful and be able to earn money, and spare it to his apprentice. Unfortunately, I'm not sure if they intend to include the ability for players to train other players, because right now, training with the NPC and doing the 'master and apprentice' thing doesn't work as well except perhaps with training for combat usage techniques.