Yeah, balance and design were definitely a challenge :)
I believe that you can't beat the game without upgrading attack/armor. I hope it becomes pretty obvious when the player encounters enemies with increasing stats, maybe with stats equal to player's. So without upgrading the fights drag on longer and then become impossible. With current design player hopefully will prioritize attack upgrade, because it makes game a lot faster and easier 😀
But I agree that design is not perfect here, it's like in roguelikes, SlayTheSpire, for example. Sometimes you just can't win, and need to restart. I wanted to add some sort of meta-progression between games, but time frame was tight. So the current game is like one round of roguelike.