I'm having a bit of trouble with leveling my guys. The easiest gate to the west of the city leads to that area with the weeping Orc. There are only a few enemies with a level 7 elite boss. After finally killing him with my level 3's (took me more than a dozen attempts), I went into the skull cave, and the enemies were even more difficult.

Crafting doesn't seem to grant XP, and you can't progress in the main quest without going through the even tougher east gate. There also don't appear to be many leveling opportunities inside the city walls.

So how do you level in the beginning? Thanks for any advice.