You can't make steel with coal unless with very modern (post industrialization) techniques.
Not really.
Wikipedia indicates that--among others--the Chinese were mining and using coal for household purposes as early as 3490 BCE, and the Romans by 200 AD. Undoubtedly dwarfs (or gnomes, kobolds, or any of the other mining races in a typical D&D world), who are assumed to have histories dating thousands of years in most settings, could be this advanced or more so.
And you assume a very industrious level of magic. Where are all the spellcasters trained (and people making good spellcasters are only a fraction of the population, meaning you need a lot of people to get enough spellcasters to cover all needs). Where do they get all their exotic spell components and implements without trade? How can the bard travel when it is so dangerous?
I don't think I am. I mentioned
plant growth (no material components)
. Admittedly, that's a 3rd-level spell. which limits the number of NPC casters who can cast it. But I would assume that the world works a bit different. You don't have to have priests and druids who are cloistered in their monasteries and temples and groves and never leave, just waiting for people to come to them. You could very well have traveling priests be the norm, making the rounds throughout a few towns over the course of the growing season. According to the math I looked up on internets, one casting of
plant growth would affect 250 acres of land. Blame the internets if the math is wrong. But that's a lot of land that gets blessed with double-yields. Medieval farms weren't that big, and they could be even smaller if they were magically enhanced.
Also, what if it isn't a spell, but a magic item that allows for the casting of
plant growth? Then even a trusted 1st-level--or even 0th-level--individual could be going around to the farms as part of their regular appointed duties?
And, since this is D&D, there's always the possibility that an Archfey, nature god, or some other entity regularly blesses the land in exchange for worship and/or sacrifice (not necessarily of a living things).
At any rate, even if this excess of food doesn't cause a population explosion (it's fantasy, it might not), it
would make the population as a whole healthier.
As for spell components, well, that's less of a problem than you think. First, there's spellcasting foci, so many casters aren't going to need eyes of beholder and tongue of bullywug on a regular basis. There's no in-game mechanical benefits to using the listed components over a foci, and it can be easily assumed that most NPC casters can afford one.
With very few exceptions, the spells that require components with a cost are actually not spells that are going to be used on a regular basis by NPCs. The only real exception I can think of is
ceremony, but that's what tithes are for. Also,
lot of those components with a cost are actually powdered gemstones or metals, so there's another reason for there to be an alliance with dwarfs.
Most spellcasters aren't going to be casting
plane shift or
simulacrum or
holy aura on a regular basis.
Here the only exceptions I can think of are divinations, since oracles are thing, but the components needed for most of those spells are reusable and--for NPCs at least--could be antiques that have been handed down over the generations.
How can bards travel while it's dangerous? Well... possibly in groups and/or with a bodyguard, and likely on roads that are patrolled by the local law enforcement or the ruler's patrols. In Level Up, one of the ranger archetypes is Warden, which are designed to specifically be appointed wilderness protectors. Even without that archetype, in a monster-ridden world like D&Dland, it's likely that any ruler or rich landowner who can afford it will hire people to protect their property.
Does the path wend through a forest? Perhaps there's a unicorn or other good creature in that forest that prevents truly evil beings from settling in for long. It might not stop bandits, if those bandits stick to robbery and the rare, quick killing, but it'll stop bandits that engage in a lot of murder, torture, and slavery. There's plenty of other creatures like that in the monster books for any climate and terrain of your choosing. It could be very typical that a bard, or any other traveler, provide an offering when entering a new land in order to pay such inhuman creatures (fey, most likely) for their protection. I mean, people did this in real life. Why wouldn't they continue to do it in a D&D setting, where there actually
are such potentially friendly creatures about? Even ignoring friendly monsters, you still have elves and other such races that live in the "wilderness" and would try to keep evildoers out.
And of course, being bards, they're certainly not defenseless. Even a 1st-level bard has some useful spells
and fairly-decent combat ability.
