Somewhere in the forest is some water from a river and a chest there that has a map for auto-mapping. I found it essential to keeping my directions straight. The battles are tough, though, unless you start with a Dracon (breath). I recommend the "starter dungeon" down the ladder to get everyone's level at least to level 2 (look for secret buttons on the wall for new areas). Before you can enetr the city you have a big battle against Rattkins, get as many HP and levels as you can first.
Maybe you missed something with the stats when you leveled, because you can get many points. The problem may be that Wiz 7 is totally random in assigning levelup points. Save just before leveling and reload if you don't get enough HP, then level up again. Wiz & Warriors had the same drawback. The assigning of points and changing classes after level 8 or so made the game a great joy for me, I must have played it 10 times. Also, put alot of points into swimming. Everyone will need at least 10 to keep from drowning (needed soon in the game). Best of...Zig