I actually re-started from the beginning thinking that the problem might have been caused by me loading my save from the demo. I still got the error but I got it in a different place so I will include info for both.
First Playthrough (loaded save from game demo):
Character: Charm, Temper, Female
1. I read minds a lot but I did not use mindreading for scoping out the hotel
2. Yes, I read the minds of Marzo and Carson
3. The Void Stream button stopped working during my talk with Amarek (where the shadow is shouting at me to read his mind)
4. It worked again after that scene but stopped again when Mierol had me in the cell at the beginning of Chapter 4. Since you can't proceed in the game after that point without the Void Stream I don't know what happens after that.
Second Playthrough (completely new game):
Character: Combat, Gullible, Female
1 (and 2). I read almost no one's mind. I didn't even check in until the point where it had stopped working last time. No hotel guests, no Marzo or Carson.
3. Again it stopped at the beginning of Chapter 4. It also stopped temporarily before that though, in a different place than my first playthrough but I can't quite remember where.
I have now deleted both the demo and the game then re-installed the game. I'll let you know my results.
In case you can't tell I absolutely love your game. I just wish I could finish it (sigh).
Edit: After re-starting I realize I didn't specify what choices I made at the start of the games. I have added that into above.
Editx2 (game after re-installing):
Character: Combat, Gullible, Female
1 (and 2):Again I read almost no one's mind, neither the hotel guests, Marzo, nor Carson.
3. I was keeping tabs on it and it stopped working right at the end of Chapter 3. I could read minds when Amalek was giving his death speech but couldn't after he was done talking to Mierol. Again, the problem was still going on by the early point in Chapter 4 where you have to talk to the shadow or the game won't move on.