You can't save any villagers before fixing the smithy (and you can't fix the smithy before getting the anvil which you believe you can't get... I know.)

Again, you can't rely on having all the ultimate skills per opponent in order to win all battles. That is just not how the game works. A Top, Versatile or a Bottom - you would always be missing some ultimate skill for some opponent before fixing the library. You need to use equipment and consumables as a compensation for missing ultimate skills. That's very hard against dark knights, but completely doable against woofians and orcs.