I've now played the game to a point where i am at the iron mine and it feels like there's no story at all. I'm having a hard time resuming the game because nothing is happening, does the story get better later in the game or am i just wasting my time?

Honestly, BG isn't big on story, but there is one in there; some letters you find at the bottom of the mine will point you in the next direction. Really, though, the first game is more about exploration.

Solving the mine crisis is the first step, but the story doesn't really start to unfold for you until you get to Baldur's Gate.
But hay, your have been through the worst bit, being incredibly weak & not knowing why you were attacked in the first place, so you may as well stick it out a bit longer, at least until you make it into the city.

I can't give you a real estimate of the time involved, but the story doesn't take long if you concentrate solely on it; that said, it's easier to do some exploring to boost your levels and gear. As for spellcasters, focus your attacks on them and get your melee fighters in their face - damaging them while they're casting will usually cause them to lose the spell, and mages especially fold like a wet paper bag when you start damaging them. Dispel Magic will deal with almost all of their protection spells, as well as potentially removing any cc they manage to get off on your party. Your own spellcasters can use their own spells to add to the damage, not to mention toss out some cc of their own.