For Dragon combat keep moving; hit target lock for towers/nests and circle around while holding the Fire Breath trigger/key down. Once you take out most of the opponents in that first fight you will automatically return to the battle tower.
You should have one skill point that you can put into Dragon Spirit, and can fly away behind the battle tower and use it to heal or otherwise rest up. You may have gotten a second dragon skill point (from a book) exploring the fjords earlier.
On the Xbox, a burst of speed is triggered by the left shoulder button. On the PC this is done by right clicking.
