Someone fill me in here as I have not reached vet levels yet. He's VR1, so is he doing the quest as a level 35 quest or is the quest difficulty increased because he's moved onto the 2nd alliance quests?

I had no problem as a 2h DK while around the same level (35) of the quest. I did use silver shards as a close quarters combat weapon for the kickback and run around a lot with health pots and dragon blood.

As a fairly poor-geared nightblade that isn't very effective with his skill points and has problems understanding how to do decent skill chains, I was able to complete this at level 37. It was hard, died a handful of times. Used maybe 10 potions.