I know. I know the answer is just to "git gud", but I am getting my ass kicked all over the place.

In one of the first fights I was attacked by this creature that grabbed my knight, shook him around, let him go only then to jump on him and immediately turn him into mush.

Also, I don't know what buttons to use to manage the inventory screen, I only know how to exit that screen, no idea how to select things, etc, but I've seen it done in videos on YouTube.

Is there any advice on how to get better at the difficulty?

If it works like the Amiga version (I was actually not aware that the game was ever ported to DOS), then the "trick" is to figure out separate strategies for each type of creature. Essentially, the various creatures each have their own attack patterns, which you need to counter. Experimentation is key, although you might also find it very helpful to watch some videos of people playing it, if you don't insist on figuring it out yourself.

Mind you, later in the game some types of creatures start coming at you 2 or 3 at a time, which may also require you to adapt your fighting style.

As a general rule (although there are exceptions for some creatures), standing still is bad, so keep moving until you figure out what to do about each opponent.

Also, upgrading your character with new equipment and skills helps a lot.

Again, if it works like the Amiga version, then spending a turn in your home village will restore one of your lives up to a maximum of 3 (out of the total of 5 you can have). As such, if you get below 3 lives, you can always return to your home village to restore them, at the cost of time.