As a concept this game is really neat and I like the premise, and the art is good, but the level reduction after every night is just absolutely absurd and made the game almost unplayable for me. It may just be i am bad at the game but the whole thing of the MC having to go back to LV.1 every night is a really unforgiving mechanic for a game that is tough right off the bat.
I do not think the game is particularly unforgiving with the exception of the map where you meet the spider-milf(Selena) early on, because she is rather strong even if you beat all enemies before and requires either good RNG or rushdown tactics. Far too strong for an early boss.
In general the basic tactic is this: Buy health potions. Beating generic shadow hood enemies gives you levels, so it's always best to just beat as many as you can before you fight a sub-boss or a the final boss of the area. Potions will keep you alive to level up. In the port city you can exchange tokens you find in dungeons for items and I recommend getting the "Auto Recoverer", because it automatically uses potions when you fall below a certain level of HP. That way you can fearlessly run into all enemies and without having to bother with menus.
Finally once you get a certain companion from the forest it will get easier, because she has the skill to give you a chance to gain double the levels from beating generic monsters. Level up her skill by letting her drain your levels and raise her affection to increase the chance of triggering her skill.
It's an RPG ultimately, so gear and special skills are what makes you better, not necessarily levels. It's a weird form of balancing, but it works surprisingly well.