Yeah, so update on this. I was able to win on Day 2(1st day technically), but not on 1st visit. First I just beat him that day, to accomplish this I got to level 9, exited the sewers, and then got Fire II, Heal II, Combat II, & Lightning II. This made the fight pretty easy, the hard part was grinding up to level 9 on 1st visit.
I then decided to try to win at level 7. This can be done, but holy crap. I could only do it when starting with +3 Agi, and starting with the additional funds. I found 16 shiny medals and traded them for 2 Devil's Fruits, then save scummed until I got MAT+2 twice. I bought the Motivating Headband, made sure to grab the Flame Ring in the Sewers. This wasn't a 1st visit run though, I did exit the sewers and get Lightning I, Healing I, and Combat I at lvl 7, I also used this to replenish HP and MP plus repair my clothes, though it wasn't really needed, I just forgot about the healing crystal. In the end, using Thunderclap to kill both the tentacles, I beat him after 4 tries. It takes 4 Thunderclaps to kill the tentacles and get Tentalium alone, how I lived that long I don't know, but I had about half health, 1 Flare Blossom and he was on fire and then grabbed me next turn. This wasn't so bad, because the tentacles were gone, so I just let him molest me until he was no longer burning, which put him somewhere between 1/3 and 1/2 health. I popped a life potion I had found somewhere, then Innocent Rage followed by Flare Blossom(no burn this time), and he grabbed me again but he had like no health, I was panicking hard. Once he let me go, a final Flare Blossom killed him and I had like 100 health. It was rough, but doable. I don't think anything else would work. I guess in the end I didn't need the extra funds, so maybe one of the other option would help more, but yeah... I tried level 7 with just Fire I Engram on my 1st visit, and yeah, that's just not happening. I got a lucky critical hit, to kill a tentacle turn 1, then innocent raged the 2nd tentacle out of existence before he grabbed me, but after I got free there was no way to survive him beating my ass, and I couldn't imagine a luckier start. Anyway, thanks for the idea, the challenge was fun.