I am curious, why NPCs would have a reduced CR. Certainly given the situation, monsters with certain magical powers and special defenses would be worthy of a higher CR. But if NPCs are in the same boat as the PCs, then the relative challenge involved in defeating them should be the same.
Beyond that... I like the setting. It really puts the fear back into fighting magical beasties.
Beyond that... I like the setting. It really puts the fear back into fighting magical beasties.