You could try grinding until you reach lvl 2 and then attempt the Welkwood boss fight.

The best way to do that would be to head for the moathouse and kill the frogs, then save and rest there for a couple of encounters and head toward the front entrance for the bandit fight. (The Sleep spell is very effective here.)
There is also a lone spider in a tower there, but if your unlucky you may loose a low HP character so be careful.
Once the bandit fight is out the way head inside and kill all the rats and clear out the rest of the first floor, but stay clear of the door that sits opposite of the entrance, there are a group of bandits in there. If you still haven't hit level 2 then try resting a few more times either outside or just inside by the entrance, remember to save first.

Some tips:

Try and flank an opponent, you get a To Hit bonus. To shift position without drawing attacks of opportunity use the 'Five Foot Step'.

Use a characters special ability if they have one, it is easy to forget.

Fighter types can charge into battle.

A mage can put enemies to sleep which then leaves them open for the deadly 'coup de grace' attack.

Getting that first level has always been a pain in ToEE and while there are some very tough fights later in the game, it does get a lot easier once you hit level 2.

You can also just walk around the village and do some running around fetch and carry quests. Yes, you're not supposed to if you're doing the Velkwood instead, but the game's hard enough no matter what you do.

Besides, if it's your first time around the various quests introduce the villagers nicely.

You can also hire help, there's a few possible henchmen in the village.

Damn, that's funny. Sadly, it's also very true! Did you set the Co8 options to give max HP on level up? If not, I'd personally start over just to avoid doing a near infinite number of saves and loads to get more than 1 HP on level up!

This game is pretty brutal at first as all of us have learned. It's over the top more tactical than any of the other D&D games. Good luck and have fun. (Grabbing a few extra XP with some FedEx quests as Jarmo suggests is also a good idea.)

You will often fight groups that are larger than yours. Some tips to help out on lower levels:

- Get a cleric with the sun domain for greater undead turning
- Use the sleep spell against anything that isn't undead
- Use the grease spell to keep enemies at a distance

When you get level 2 spells you can also make use sound burst (cleric, bard) and web (wizard, sorcerer)

Deep slumber (3rd level spell) replaces sleep when opponents get tougher.

All of these abilities and spells have in common that they can affect more than 1 opponent at the same time. This means a single saving throw won't negate your spell completely.

As a fellow newbie I had a similar problem. It was really rather frustrating at times and I simply couldn't figure out why the fights seemed so stacked against me in even the simplest of encouters. Particularly annoying was that my mage seemed to be utterly useless, especially with a pitiful 1HP. Wasn't even sure if I wanted to continue playing the game.

It all started to turn around by the time I got to the moathouse and managed to eventually cleave my way through the frogs encoutered at the start. Everyone levelled up shortly afterwards and it became far more tolerable.

Min/max your stats as well. Gotta munchkinize to be the most effective...

Yeah, the moathouse was brutal, but after that... well the moor was just as hard, but after that... oh damn that king frog! But then it all started working out... except for the elemental temples... oh and the nodes were a biatch, and the end fight! So totally unfair!

But there were parts when all of it was coming together just fine! There were too!

One of the best things I ever did (that was kind of cheating) was find a fairly-high-level evil humanoid and then save. Then I kept trying to charm him until I got it. That carried me through the first parts of the game.