The eighth floor Erin was doing a slow circuit of was home to the magical door that would bring her to The Wandering Inn and Liscor. But the ninth floor, where the [Smiths] and [Alchemists] worked, lay above it. And so part of the eighth floor was overshadowed by the bottom of the ninth floor, providing welcome shade in the summer.

It’s quite possible Dawil doesn’t know the full story, and is basing his comments on rumors and hearsay – similar to how the adventurer groups reacted to the Horns when they went back to Celum last volume. From the sound of it, whatever mistake Pelt and the others made could easily lead to others trying to downplay how good those smiths actually are, especially if the mistake was something simple and nowhere near worthy of what a master should do.

Seeing as Erin has to feel the emotion to create the flame, making herself intensely fearful to make a fear fire to scare away enemies seems like a bad idea. Especially since, as we saw with Skinner, not everything is going to be affected by fear the same way (i.e. goblins). Crippling herself with fear to potentially scare away enemies – and, in the process, also making all of her allies terrified – would be idiotic.

Unless she figures out a way to control who it affects, she’d be better off using it as a buff prior to fighting. Giving her allies a huge boost of bravery, for example.

He weighted the metal on the side of his hammer, lifting it up and down, measuring the weight -> weighed the metal

“Or he’d done evil, as evil as Erin understood the word.”

Could be “evil, or evil as Erin understood” or “evil, as Erin understood”.

“Moreover,[ ]he was talking in code as he guessed to the composition of this particular bit of mithril.”
“the world of blacksmithing was as competitive and secretive as any[ ]royal court.”
“Disapproving.[ ]As she fumbled for a pot of the clay the Dwarf wanted, she reflected that it would be a trick selling the mithril-and-steel blade.”
“He didn’t respond.[ ]Pelt was just trembling,”
“The Dwarf paused and then nodded.[ ]He reached for the flame.”
“He took the Grasgil bardiche, and holding it by the tongs, inserted it into the fire.[ ]Quickly, as the heat softened the edge, Pelt yanked it out.”

Double spaces, some mentioned by juppie.

“Alright.” is not a real word.