In all honesty, I think simply making the starting health just a tad higher will make the beginning much more bearable.
I can totally see how you may be trying to let the player feel the challenge up front so they are more dedicated to beat it. If that's your direction, the leveling system really makes that possible and actually compliments the idea of building your character up really well. I wouldn't even mind fighting a mini-boss near the beginning to try and build exp. After finally beating him I would feel great and wonder what the game has to offer.