Mana does not regenerate. Health regenerates a small amount only on Casual mode. Mana can be recovered through the use of the Recovery Skill (start with 2, can raise to 4), mana potions, and several other potions and scrolls in the game.
Yes, balancing mana consumption is part of a balance to the game. Otherwise, the game would be reduced to a rinse-and-repeat cycle of using high level mana skills followed by standing around to regenerate.