You are the first one to get the boneghost I think, its triggered by your hatevalue which is connected to some of the choices you are making. It is impossible to defeat at any point but moves incredibly slowly. Optimize is a bit tricky and not to be relied on, you need to switch between different things to manage different encounters. Jack of traitors gives more attacks to all of your attack moves meaning that an attack that hits thrice will hit four to five times instead. It does not raise power however and will not be triggered by the optimize if you have something else that will.
Jack of the suffering increases both evaporation and phantasm, more or less meaning health and magic. Taking the sidepath by the crowlady gives you Gaslighting for free. It counters a lot of attacks, turning them back upon the enemy making them damage themselves. You can progress without ever using it or grinding however.
Jack of the torpid is all purpose but does cancel paralysis, making the euthanasia fight a breeze.
It's not really about optimizing, it's about adapting to different encounters. You can heal with your skills outside of combat. Interacting with the scarecrow will either give you the mood certainty which counters confusion or another one which adds a possible confusion effect to your attack-moves. Confusion is really the killer stat the fishboys can apply.
Plenty of people have gotten through this, I have done it with minimum required encounters, meaning avoiding everything that is not forced upon you and reaching level 5 once you hit the last boss of act 1. You can reach level five way earlier however. The curse guys in the first combat zone are easy, kill both of them, a gundeer and the ghost deer and you will be at level three, take out the double encounters with bullet spray which hits both enemies and you can easily reach level four before hitting the lake. You manage your equipment and you manage what moves you choose. Hit a couple of the fishboys and you are at level 5 early where the real good stuff starts to unlock.
Clearing it without any grinding at all is not easy but it is completely doable if you take the time to prepare for encounters. Autosave in every area does make trial and error less punishing. This is a matter of taste and not right or wrong.
Some people have had this reaction, but I have had a lot of feedback at this point. It's not that its just me who are able to do it. Dev on break did a real good job of understanding everything if you want an example, otherwise there are plenty of comments at my page.