How do you get back out of level 1? Cannot open the gate, cannot go up levels -- just wander around until entire party is dead.

If you are talking about the entrance gate which closes directly after entering the castle: It will never open again.
Your quest is now in the castle and the surrounding areas.

The game is difficult. Equip your inventory and save the game. Save after every successful battle where no one dies and rest if needed. After your party has gained a few levels you can dare to go down the stairs and examine the area below.