
It doesn't come into play until you fight the second boss: the arena they're in has three statues.
In the first building, you'll probably find an item called "Shard of Heroes" which the game is supremely unhelpful about. Letting him die has no benefits whatsoever. Cut off his hand you'll meet him again later on that way. Early on in the game you'll encounter a monk dying from a poisoned bite. Also, characters that give you quests usually aren't too helpful regarding the location of what they send you to find. The game world is pretty small but chock-full of secrets. Some enemies are immune but it's an amazing way to cheese most of the game. If you have trouble with a boss, try poison. With the first one it's taking no damage. If you beat a boss while fulfilling a special condition, you get a slighly better version of their weapon look those up in a guide if you want them. The flip side is that it goes in your shield hand so if you want to use it, you'll have to rely on dodging. You'll find the ranged weapon pretty early in the game and it's mostly independent of stats (damage scales with faith but you can customize it for other purposes). If you want the maximum bang for your buck, focus on slow, heavy weapons, killing a boss with knives will take a while.
If you want to focus on magic, it's probably best to take the deception school: Stab is probably the best offensive move and Shift makes you go invisible and do crazy backstab damage. They aren't necessary but if you find a spell you like, it can make your life a lot easier.
Speaking of, every magic type has a decoy spell, a ranged attack and a self-buff. You can alter stats, you can't pick another spell school until NG+ that being said, the game is easily beatable without magic. Character creation: class determines your starting stuff and equipment, magic type what spells you have access to. Don't spend your XP on unlocking spells, you can find enough items that give you a spell point to unlock everything (which you don't need anyway).