Unless I missed something, it looks like the only thing you can do right now is go around the map fighting goblins.
Given that, there's just not much to say at the moment. Because there is no penalty for resting as soon as you are able to, I basically got to level 6 by just spamming Club attacks until I got the prompt to Rest, which I did immediately.
I then tried to play a little bit more strategically by switching between Club and Cower; it SEEMED like the damage I did varied on where the goblin's energy meter was at, but I'm not sure (maybe show damage numbers?), but again strategy didn't matter as you can just rest without any penalty.
It's hard to say whether the combat is good or not because it's just too bare bones at the moment. I'd like to see more before I have a solid opinion.