Hello, and thanks for trying out VoltAge:Genesis!
Regarding the Cytoplasm bounty - Cytoplasm is a "common" drop from both Sludges and Barrel Sludges, both of which can be found in most "open" (i.e. not underground or inddors) areas of the game. Because some areas have larger spawn pools than others, they can be hard to find in some areas...if you go to the sandy area near New Panavinto (the town with the clean water west of where you start), they should be fairly common there.
Regarding levelling up - Fighting normal monsters in areas close to New Panavinto should be enough to get you a few levels fairly quickly; however just remember that enemies will not generally attack you on the roads. As a rule of thumb, the enemies to the west of the starting town are easier, while the ones to the east and south are harder. Stick close to New Panavinto, make short forays into Deadlands to earn money and exp, and be sure to talk to everyone for more quests and lore. If you are progressing through the game completing quests as they arise, you should not need to do any heavy levelling until just before / after you leave for the island of Mateyo. At that point, the difficulty of the game will jump up quite a bit.
Regarding the Antlion - Assuming you are referring to the "Scarred" Antlion that the Deadhanders at the Checkpoint send you to fight, I would recommend not tackling it until you are around level 12-15 (unless you are willing to spend lots of time and money getting lucky with Unstable Batteries)...to avoid the Checkpoint you can simply cut south through the dried lakebed near New Panavinto.
Rest assured, you are not doing anything wrong! Because of its open-world-lite setup (and my own level of experience with RPGs of this sort), VoltAge:Genesis has the potential to be pretty tough (or even downright merciless) in some areas. Keep at it, go slowly, and I am sure you will be fine...and if you need help or tips, I am always here to help!