You can raise your stats with some of the Perks as you level or gain Perk Points. Fights don't always involve one of the participants getting to 0 HP. You can visit the Inn for hunger and health, but recovering health otherwise is a matter of resting (ideally at campsites, the little camp icons on the encounter locations), using potions, and healing magic. Money is mostly from quests, treasure caches, a few encounters here and there (especially the first time stealing from an Ogre) and from the Arena.
OH MY THE DEVELOPER WOW first of all WOW this game is so good, from the characters to all the scenes and events but that's hard difficult too! i tried to get money with the sexual way to make them and i got a "permanent" trait... so maybe I need to get another story. Maybe u have some info that could help me? :D