She must pop out a little beast in order to complete the quest.
You can always try again. Its not like the character can only get pregnant once.
In versions prior to 0.8.6.1 you can get a 'stuck' pregnancy. The only ways to get rid of it is to use the potion of regret or ... start a new character.
What is the best way to level up in this game?
I've seen mob go from lv5-15 to lv130-180 O.O
There is no way to upgrade the weapon like the armor for now right?
Ways to level up:
Harvest anything you find on the ground.
Cut down trees.
Mine stone.
Mine ores.
Build things.
Craft things from your inventory.
Build crafting stations and craft items in those stations.
Run around.
Jump around.
Finding various ruins, troll camps, caves, or fast travel waystones will give you experience.
Cook things in the Cauldron.
Creating Bronze, Iron, Steel, Dark Steel, and Glass in the Furnace will give you experience for every bar or glass shard you create.
Seriously. Pretty much every single action you can perform can give you experience to leveling up.
No, there are no T2 or T3 weapons.
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Combat in this game has gotten harder over time. Personally, I tend to avoid fighting anything at all in the game, until I can get steel gear and get to around level 20-30 and even then I just stick to the lowest monsters (wolves, bears, werewolves, and werebears).
If you are good with a bow, you might have good luck fighting Satyrs, they love staying at range and throw rocks at you, so if you can headshot them consistently, you should be able to win most every fight with them.