Strategically, I prefered to keep my units not too far from eachothers, because the worm warped to my caster/archer in the back instantly leaving my warriors useless behind luckily on second try I equipped my warrior with the jumping fire skill.
What made this fight easy was to cast Bless on his cursed fire which heals you for a few turns instead of doing dmg.
Also, since he was the only boss that I died to, on second try, I actually equipped healing potions and personnally I felt invincible with them, they are really easy to make, dont waste buying them.
As for lvling, I reached this boss at around level 8.9 missing really little for level 9 and I did miss some quests, and didnt kill any innocent people. I was being pretty thorough while playing though. I got level 9 after the boss exp.
If you are still not strong enough to your liking, checking all shops for new gear every hour or level up is a pretty simple way to get better stats on your gear. There are easy way to make money in this game using crafting.