We are going to redo that last encounter because of the ordeal with the Web Trap.
Artaterxes makes some good points, but I would hasten to respond to a few things.
As for the first point about expansions, we actually started with the Base Game and Lair of the Wyrm. I acquired the other two expansions more recently and we just added really added the Travel Cards, Items, and Monsters. I'm not using OL cards from those later added sets. So far, I have 2x Web Trap and 2x No Rest for the Wicked. When I buy more, it will be limited to the Saboteur or Punisher decks. In fact, I haven't even used monsters from LOR or Trol, save for the Volucrix Reavers once. I'm not sure how overwhelming it really is then. In fact, it seems to me that virtually all of our rule confusion has been about things that are particular to the base game (e.g. Web Traps on Jain's feat). Furthermore, what little we have used beyond Lair has largely benefited them in the form of equipment.
When I said that they "forgot" that Merriods have reach, I should have instead written that they didn't take Reach into their defensive calculus as well as the cards in my hand that made this turn possible (Frenzy and Dash). I exploited what seemed like a small vulnerability and they also didn't realize how hard Merriods can hit.
I've also offered them an opportunity to look at deck. They have told me that they know what cards I have. Nonetheless, I've been thinking about printing them off a list.
You also seemed to implicate Sole Purpose as a possible source of my dominance thus far. But the thing is this last encounter is the first time I've even used it. I didn't want to overcomplicate the game for myself either so I have been using the Plot Deck rather sparingly.
I follow your hesitance to add too much too soon. For the most part, I've been holding back on using certain abilities or skills because I am still feeling my way through them. Nonetheless, you are right that the games can be a bit competitive. However, I'm not sure about the suggestion to lose intentionally at the OL. There are too many horror stories on this forum about major fortune reversals in Act II. I don't want to spoil any chance for victory for me.