As WhiteWhale mentioned, saves 'should' work between versions, as they do according to my tests. Apologies if for some reason they don't, though.
The Velora fight is supposed to be very difficult to win. Think of early boss fights in games like Sekiro, where you fight a really difficult boss that's supposed to kick your butt to show you how weak you are, but if you're really well-prepared, there's a chance you can actually win instead.
If you just need to progress, I'd suggest picking the 'game' option instead.
That was my thinking, anyway. Hope this helps!
I'll try to Copy and Paste my Save, then and see if it works. Hopefully, it does because I had a lot of stuff and it just felt bad to lose everything I had and have to go through it all again. I didn't know Velora had a Name. I thought she was just an unnamed Demon Girl. Velora is a cool name. Also, Unfair Fights are the entire reason I avoid literally any Video Game made by FromSoft and any Video Game that I consider a "Souls-Like". I always find it strange when a Game tries to intentionally make you feel weak. Is it a Requirement to go into the Mall? If not, I will just avoid it so I don't have to be anywhere near Velora since she seems to be a Guaranteed Encounter as soon as you walk into the Mall. Also, is there any way to get EXP without Fighting or is Fighting Enemies the only way to gain EXP?