Head up the stairs and check the bookshelves here for a book. Go through the nearby doorway and check the bookshelves here for a tattoo and another book. Now head back downstairs and find the library. Check all the shelves in here to find a bunch of books.
Follow the video to make your way out to the courtyard. Speak with the boasting man here and accept his challenge to beat his record. Keep the run button held down for the entire course, and try not to run into any of the people that pass by you. A clean run should beat his time by at least a second, which will earn you a bit of gold.
The next side-quest you can do is the Apple Pie mission. Speak with the woman in the building just beyond the archery range and agree to find apples for her. A bunch of apples can be found laying on the ground in the area between the melee ring and archery range. Return to the lady to deliver the apples and take your own pie as a thank you.
Now it's time to head to the melee ring and move the story along.
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