Yep, the game is non-linear. However, that oughtn't to be a problem, since the Might & Magic games are like that, too.
Anyway, from the monastery to Arnika, your party should be no higher than level 5. Some would say even lower. The critters are based, in part, on your level. I say "in part" because there will be areas your group will find too tough for awhile.
Save before you leave the monastery. Monsters are a random mix. If you find the creatures too hard no matter what, you can restore and try again.
There's a house you can't get into along the road. I've been able to rest up behind it without being disturbed.
Arnika should not be all that difficult. Stay there awhile and work on building up levels and skills.
As it is, your main problem may be poor development of your characters rather than a poor mix of classes. It's been too long since I played for me to recall all the details, but I'm sure some of the others here will post some tips for bringing your merry band up to peak performance.
Nightowl2
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