Difficulty doesn't have much of a bearing on output damage. At worst, Nightmare reduces player damage by 5%, including spell damage, which is fairly negligible.
I certainly have noticed a bit of a problem with single-target vs AOE spells and their damage coefficients, relative to their mana costs. The single-target ones just don't seem that helpful, unless you want to blow something dead in a short space of time by using Arcane Bolt, Lightning Bolt, Winter's Grasp and Drain Life on something in the distance all at once. Most of the time a good AOE spell like Fireball, Cone of Cold, Shock etc. is far more effective use of mana and time. They output tons more damage overall and sometimes CC everything at the same time.
Chain Lightning in particular is a pain in the ass when fired at you, since you lose a lot of stamina and take lots of damage if you're clustered together, but its quite effective when the player uses it, too. The more enemies there are clustered together, the more damage it does, and despite the tooltip it DOES NOT hit friendly targets. You can practically destroy an entire group of minor badguys with a single chain lightning. Its biggest flaw, however, is that it doesn't scale with spellpower. Chain Lightning does 20 damage base and less and less the more targets it hits, so the only thing that makes it deal more damage is having more enemies near the main target, which kinda sucks.
Curse of Mortality is a HUGE pain in the ass against players, but almost worthless for the player. Whoever designed that spell needs to be shot. 50% reduced healing I can live with, but 100% less healing, a long duration, a DoT effect AND no health regeneration...I've been killed in the Fade area by that spell, FIFTEEN SECONDS after combat was over, because I couldn't heal at all and he put it on me right before he died...really frustrating. Whereas, enemies don't have enough healers to warrant purchasing the spell for its anti-healing capability.
This is why its best to have a Templar around with Cleanse Area, and grab one of the Dispel spells on your Mage, so they can remove those effects from each other, but that's quite an investment to counter just 1 type of ability that isn't used against you very often. I usually just forget about it and let the dude with the Curse die - its not like there's anything you can do about it without a dispel.
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