Everything is killing us and we are doing everything right. How do you survive other than just dodge, block, blue sand armor, and get gud?

My wife and I are playing on ps5. She is sword and board and I am 2 handed claymore (the one you get from the bandit camp up north). I saved and saved and scavenged and was able to scrape up enough for the blue sand armor just in time for winter to keep me freezing (and I drink plenty of tea). I would love to have the bleeding sword but the hyenas wont respawn I guess until we leave the zone for 7 days. The map is so empty and we can't farm anything cause of the lack of respawn.

Are we supposed to beeline to the next region before clearing out anymore dungeons? Blue sand armor and better weapons are BARELY keeping us up against bandits. We went to the pirate cave and the very first pirate thing wiped us even after prepping with rags, the kick, and shield bashes (as if we barely have the money unless we spend and hour farming berries and blue sand since they nerfed cooking/alchemy stuff). I constantly heard how blue sand can carry to the end of the game and felt so accomplished getting it, until a single bandit with a halberd beat me harder than a child being disciplined in the 90's.

Everything almost two hits us to death unless I lay out 87 traps, and even then they are still only "mostly dead". Getting mana the first time was hard cause of whatever the critter things (not trogs) inside of the mountain are would sponge any hit and then immediately drop us. We are doing the kicks but the enemies just guard and immediately get their impact back. We get around them and they take advantage of being mostly spongy and just attack while we are doing our first swings.

I truly hope for a better open world experience in the next game where you get stronger which allows you to hit harder and absorb more damage.