As you probably noticed Snakewood, each time you defeat an enemy (that isn't way weaker than you) your HP increases by 1. Your stats, besides being capped out at 60 (they really should be by that point, especially if you've bought every powerup for every section), get a small bonus from your max HP as well, I think. If you've got enough power, then you can reduce the encounter rate to low to make it easier to map out each area and get your stats to 60. If you're still somehow underpowered, then you shouldn't reduce the encounter rating or you won't be strong enough to beat the boss at the end of an area. Also, if you don't want to map out areas to max your stats, the enemies in the last dungeon set all drop the 3 stat boosting items regularly, so you can camp by the fountain. As a beta tester, I can tell you Normal difficulty was designed so that with a bit of effort and planning, you will be maxed out and ready to fight the final boss on the normal encounter rate and if you do the 90% mapping thing on each level. Easy is just a reduction to all the enemy stats, but if you run ahead too much without exploring or keep the encounter rate on low, you'll still end up underleveled. I don't really have anything to tell you about the lack of HP bars. A lot of RPGs don't tell you how much HP the enemy has. I know it doesn't bother me, but that's probably because I play so much Monster Hunter.
Also, since I see this thread still gets attention now and then, I figured I should point out that on the first post of mminit's blog is a link to the current (1.3) version of the game (the nsfw version) in case the links on the front page ever get taken down or something. Judging by the filesize they're the same file, but just in case it goes down here, you can get it on his blog if you check the comments of the first post (as in the oldest). And like James said, he is still working on a new game, there are screenshots on the blog and his twitter page. It's gonna take a while, LL was in development for a long time before everyone found out about it.