ToME: the Tales of Maj'Eyal

On insane difficulty what exactly does it mean by my character being normal instead of elite. I notice that I start with fewer hit points than I normally do, and I get half attribute points on leveling up. Are these and the damage/healing penalties the only differences? Am I supposed to be able to spend the half attribute points, leaving me with -0.5 points?

Yes and on next level you 'll be back to 0

Not being a elite means you get less stats, and less resistance to stuns and such