I gained only ~20,000 XP (without cheese or Dwarf survival route) on Tactician at level 13.
Around 12k for the Dwarf and then 7k for the Demon.

One of the least enjoyable fights in the game, just cheese it

I tried source vampirism on the demon's corpse and it posessed the character in question. The corpse disappeared and the demonic posession ends as usual, with the demon staying dead but the corpse being permanently lost

I go to the southeast corner of the room standing on a rock pile and snipe the demon with my archer, The combat don't start after you destroyed all the 4 pillars so you can start with Ballistic shot

Didn't get any rewards. Just xp. Oh well. Quest is closed. Found the gold earlier looking at a map online.

The stash that the dwarf tells me to check had like two gold in it...

I finished the demon with tentacle that atrophied it. and It doesn't possess anyone. First kill as well, someone should try it out.

By far the easiest way I've found to beat the fight without a summon (It also fixes the issue where the dwarf sometimes doesn't consider the party his rescuers if a summon gets the killing blow on the demon):

Do the three pillar destroy tactic and attack the dwarf until the knockdown effect is permanent. Destroying the fourth will spawn the demon and the dwarf separately. Once it is out of the dwarf, the range of the demon's possess ability appears to be 17m, so if you have enough initiative to go first you can use teleportation from one front corner of the upper level to move the demon to the diagonal opposite corner on the lower level, then slaughter it with ranged attacks at about 18m. My archer (Sebille) wore the teleportation gloves and did this. Ballistic shot and adrenaline turned this fight into a one-round kill for her, the demon didn't even get a turn.

Big recomendation, if you drop some oil at the edge of where you are gonna spam totems using the suggested "Cheese" method, they will go through the magic armor of the demon, once he has 0 magic armor, the dwarf will keep freezing him, so you loose the risk of the dwarf using chameleon last moment and the demon coming to you.

Pain in the *** ****ing quest
My avatar is so overpowered once she's possessed the whole team gets slaughtered