If my players have grappled, restrained and knocked prone my lone spellcaster NPC (5th level wizard), and then held a blade against his throat, does the NPC have any further options? The NPC had no magic items at hand, and I assumed he couldn't cast spells in this situation.
This result was a reasonable outcome for the encounter, but it just left me wondering if I had shortchanged the NPC. Was there some action that the NPC could have taken?
Your spellcaster wasn't gagged, so he/she could have cast the second-level Misty Step, which is verbal only (and a bonus action to boot!). This allows the caster to teleport anywhere that's within sight and within 30 ft.
While a grapple doesn't, per RAW, automatically interfere with somatic components of a spell, it is a reasonable ruling from a GM in cases where the target is clearly unable to make complex gestures because of being pinned down. As long as the wizard is allowed to speak, they can use verbal components of a spell.
Misty Step is a 2nd-level wizard spell, so it is accessible to a 5th level wizard. It allows teleportation of 30 feet using only verbal components on a bonus action. This ends the grapple (if the grappler doesn't have a particularly long reach for any reason), allowing the wizard to continue the fight or make an escape. Since spells with a casting time of bonus action are said to be "especially swift" (PHB 202) it doesn't require stressing one's suspension of disbelief to assume the verbal components are spoken fast enough to take effect before the grapplers can react.
There is a possible counter to this trick though: Characters surrounding the wizard can take the Ready action to attack the wizard in case he speaks. This might require GM permission to define a trigger in the manner that fires after spellcasting starts but ends before the spell is complete - and actions are usually meant to be sequential in DnD. A ranged attack could still be readied to target the wizard in the event they disappear, because that works even if the wizard is no longer in the immediate vicinity of the readying party.
The Mage Slayer feat on the other hand won't work, since it is not an interrupting action - the attack only happens after the wizard is gone, at which point they're likely out of the attack's range.
A prone, restrained, and grappled Fighter can still attack using a 2-handed weapon, but with disadvantage. A Ranger can still attack with a longbow from this position, but with disadvantage.
Swinging a sword or firing from a bow is not simple when you are standing up -- don't underestimate that effort. Swinging a sword is not just moving a big knife around, and firing from a bow is not just pulling a string. These skills are much harder when you are also prone, restrained, and grappled. However, it is still possible to do these complex actions under these conditions.
If non-casters can perform complex movements like that, a Wizard should still be able to cast any spell (with disadvantage if it involves an attack roll). Their somatic components just have to be present, but they don't require a degree of precision.
You also could have still cast a spell with Material components, if the players hadn't specifically stolen his component pouch or arcane focus. Material components just need to be held while casting.
Here are things you could have done, aside from Misty Step:
Blink (3rd level spell) involves VS, and allows your character to jump to the Ethereal Plane. When reappearing in the Material Plane, you can choose any unoccupied spot within 5ft of the point you disappeared from.
Shield (1st level spell) involves VS, and allows you some reprieve since it can give you +5AC against all their attacks for 1 round. This may offset the Advantage they have on their attacks against you.
Thunderwave (1st level spell) involves VS, and pushes everyone within 15ft away from you by 10ft if they fail their save, instantly removing yourself from the grapple.
