Yes, you have to farm ХP from battles and gathering materials. You can also buy books on Saturdays and Sundays from the NPC, which is located on the second floor of the brothel. These books will unlock a skill or give you ХP for it.
!!! When you level up a given skill, the HP you get from materials and enemies will decrease. Forcing you to go to another more dangerous area. Don't rush for that!!!
I wish you a pleasant game and I hope you like the scenes.