Played another hour, finishing the basement thing, and for some reason, I now *can* pick “Rest” in the menu. I have no idea why. I also bought the equipment and a bow and feel a bit more capable of dealing out damage, although it’s still difficult. The healer gives potions if you say you need healing but can’t afford it.
I see very nice gear in the arms seller and there’s talk about a way to “steal” some of that, but haven’t tried that yet.