Sorry to hear you made the rookie mistake of taking the default party, which has several glaring problems.

Thieves are largely a wasted party slot compared to a monk or knight - lower melee damage with insufficient utility to justify it. Monks can serve as a secondary healer in a pinch, have tons of armor, and do a lot of damage. Knights do a lot of damage and have side-utility such as repairing equipment and identifying monsters. Thieves get disarm trap (which you don't need that much of and gets obsoleted by telekinesis), stealing (which only makes everyone hate you), and basic elemental damage (good for hitting slimes at higher levels and that's it).

Then there's the issue of having a dwarf as the cleric. What the game won't tell you is that a lot of enemies hate dwarves. There's a hidden behavior in many enemies where they hate a specific character species or gender, and you can only find this out by reading a guide or watching for enemies that suspiciously only go after certain characters. You can use this to your advantage - since many enemies hate dwarves, make your knight/monk/tank a dwarf. Having a dwarven cleric makes about as much sense as having your healer taunt in a WoW-like MMO - it will wipe your party and someone's getting booted from the raid.

If you aren't willing to start over:

Get bows for everyone ASAP. In the early game, bows can mean the difference between life or death.

Keep your distance. You don't have the health or armor to slug it out in melee.

Harmondale, Barrow Downs, Erathia, Tatalia, Tularean Forest, and Bracada Desert are full of low-level enemies that you can slowly whittle down piece-by-piece with bows. Good for leveling.

If you're short on gold and gear: Save up 2000 gold for a Wind Master (NPC follower that casts 2 hours of Flight once per day). There are areas in Bracada and Avlee with massive amounts of treasure guarded by mid-level enemies. Don't fight them. Instead, fly over them out of reach, corralling them away from their loot. Then sweep in and take everything. Wind Masters pay for themselves quickly in the early game.

Focus on skills that you need and skills that play to each character's strengths.

Knights are best with sword + spear, although at extremely low levels before you can dual-wield them I recommend a 2-handed trident or spear.

Thieves suck, although the dagger + sword combo is the best you can make out of a bad situation.

With a dwarven cleric (already a major mistake), focus on body magic (healing) and armor skills. Clerics are best with leather + shield because chain will slow you down.

For a wizard, any elemental magic except earth is good for different reasons. Air gives you critical utility (wizard eye, feather fall, shield, flight, invisibility). Water gives you strong offensive spells (poison spray, acid burst which does physical damage) and critical utility such as water walk, town portal, and enchant item. Fire gives you area offensive spells - Fireball is probably your first AoE spell, and later you get Meteor Shower which rains down flaming pain on your enemies. Fire bolt sucks and should only be used on enemies immune to poison spray. DON'T invest in staff or dagger fighting on your wizard, that's a waste of skillpoints that should go into magic skills.

Bah. The default party is a good choice for a newbie. It covers all the useful skills to an acceptable level with minimal redundancy.

Bah again. A second Knight, especially for a newbie, is adding redundancy while reducing some utility. Having played without Disarm Trap, I can say it is definitely a worthwhile skill, especially if you've never played before. It deals with traps in a simple, straightforward, repeatable fashion, and it does so without worrying about spacing or taking damage. There are a few chests that cannot be acquired by Telekinesis without taking damage because there is no angle where you can see the chest while being far enough away to avoid damage, and relying on Telekineses means focusing Earth magic early to the detriment of other, more important magic skills, as well as having to eat trap damage early while your max hp totals are still low, which adds stress on your healing abilities.

Thieves are well worth a slot simply for Disarm Trap. The fact that they are still decent, flexible combatants with swords, daggers, and leather armor is a lovely bonus.
Here's a discussion/comparison of the melee damage of the Knight, Thief, and Monk.

Monks are a pathetic secondary healer, and I say that from experience with a Light Path Monk secondary healer. The only reason Dark Path Monks aren't as worthless in magic as Thieves is because even a pathetic Heal spell can be used when standing around between battles.

If you really can't stand Thieves and want a secondary combatant + healer, then take a Paladin. He can Master the Self Magic, and while he'll have lower damage than a Knight, he has a chance of paralyzing opponents when he hits.

This part is vaguely true, in that several kinds of early enemies don't like dwarves/clerics. However, dwarves bring extra starting Endurance to the Cleric. Also, controlling your aggro will control the incoming damage, which will keep even a dwarf cleric up and running.

Having a Dwarf Knight means sacrificing Speed for more Endurance. Take Goblin Knights for the Might and Speed bonuses; Knights have enough HP that they don't need the extra from Endurance.

Be careful in the Barrow Downs, because gogs shoot back and explode on death. Make sure to kite the dudes in Tatalia and Bracada, because they will murder you in melee. Otherwise, I agree fully here. A low level party can also handle the Wyverns in Avlee as long as you're careful to kite them; don't venture near the Water Elemental enemies, though.

Focus on Body and armor skills, but use Chain instead of Leather for a Cleric. The recovery penalty isn't a big deal for a Cleric, and Chain provides more AC than Leather while also reducing competition for equipment (use the best Chain and the best Leather, instead of the best and second best Leather).

Pick one weapon option for the Sorcerer (whatever isn't being used by the rest of your party), and put just enough skill points into it to push it up to the highest mastery the Sorcerer can reach (Expert for Dagger, Master for Staff). The cost is minor for a bonus that you'll be using throughout the game. That goes double for Expert Dagger, since you'll be able to hold an extra enchanted weapon (like for +stats).

The default party is terrible (even more so if you're new) for several reasons:

It only has 1 healer. A newbie will want multiple healers, especially so they can heal each other if 1 of them gets KO'd or worse.

The healer is a dwarf, which means it will get targeted by everything and everyone. Also, titans attack female characters first, which means that your healer will be tanking the titans in the Land of the Giants later.

Thieves are a wasted party slot. If you're taking up a whole party slot for disarm trap, you're doing it wrong. Often, an archer, ranger, or monk will suffice for disarm trap. Later on, you get Telekinesis which makes disarm trap obsolete except if you need to open containers while invisible. Even in the rare case of chests where you can't avoid taking damage with telekinesis, the all-caster parties that I typically use have more than enough health at that level to safely eat the damage.

Except that starting stats don't mean diddly-squat after your character have been chugging from colored barrels all year. Bad stats can be fixed; species is forever. A few extra points of endurance is by no means worth having half of the enemies pile on your primary healer. Also, Knights get the armsmaster skill and weapon masteries, both of which tend to decrease recovery time per skill level.

You shouldn't be doing that until mid-game once you've mastered fire/water/air. Dual-wielding for +stats, again, isn't needed until mid-game since most of the +stats you find will be too low to justify the cost earlier on.

Actually, the recovery penalty is very visible. I switched my cleric over to leather armor so he could spam blaster fire with massive amounts of haste stacked for effectively 0 recovery time. Even if you aren't talking end-game, minimizing recovery time maximizes potential healing per second. If your cleric is tanking, you're doing something wrong.

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My recommendation for a newbie-friendly party that works well at any level:

Dwarven knight/monk/archer/paladin
Human/Elf Druid
Human Cleric
Human Wizard

First, you absolutely need a cleric for grandmaster protection from magic. This prevent instant death and eradication attacks which are more common than you think: Ancient (blue) wyverns and minotaur lords (the red ones) are the most common enemies with instant death. At higher levels you have blood titans (the red ones) which have a good chance to instantly kill unprotected characters at range, which will cause you a lot of problems if you don't have a cleric. There's also a one-time boss fight featuring a ranged instant eradication attack.

Grandmaster elemental magic (wizard exclusive) is nearly a must-have for a newbie. Grandmaster town portal and Lloyd's Beacon will make your life a lot easier. Grandmaster invisibility can situationally trivialize some areas that would otherwise be painfully challenging. Also important: Starburst, which allows you to run airstrikes on enemies immune to fire (this makes your virtual existence a LOT easier in the Land of the Giants later on).

Additional bonus: the cleric and wizard can both grandmaster Light/Dark. If you take the dark path, 2 Shrapmetal casters will shred anything dumb enough to get in your face that isn't immune to Dark damage.

Druids are overpowered in the early game, being able to expert all elemental and self magic with no promotion - and increase this to master level at first promotion. Plus, their promotion quest is easier than it looks if you rent a Wind Master for flight. Get your Druid promoted at the first opportunity and you'll have a character combining the healing of a cleric with the punishing elemental damage of a wizard and the weaknesses of neither. The hidden catch is that Druids drop off a cliff at 2nd promotion, gaining only grandmaster alchemy and no grandmaster magic. Despite this, the Druid will continue to provide elemental damage support and strong backup healing well into the end-game.

Then there's the choice of your martial character (fighter). Knights have no casting utility whatsoever, although they do the most melee damage and have a lot of armor. Monks do almost as much damage, provide healing support, and are better at absorbing damage due to how the Unarmed and Dodging skills work at grandmaster level. Paladins are also decent at absorbing damage while providing melee stuns and better healing support (although if you already have a cleric + druid and need more healing, you're doing something wrong). Archers make surprisingly durable tanks once you get grandmaster chain armor and mainly serve as even more elemental damage at end-game.

The default party is perfectly fine, and one of the easier parties to work with because it covers pretty much everything. About the only real class swap to consider is a Paladin in place of a Knight, depending on whether you want a bit more defense or melee offense. The only skills it can't GM (that matter) are Alchemy (but you can buy/find black potions) and Perception (which the Thief can Master).

Alchemy and a little caution easily make up the difference.

The goblins happen to be in Harmondale, which happens to have the cheapest inn and temple. They are not a big threat as long as you don't go barreling into large hordes like an idiot.

The titans in Land of the Giants are mostly irrelevant, because you shouldn't be standing around waiting for them to kill you. You're either murdering them or avoiding them. They can't one-shot your cleric because the cleric has Shared Life, Power Cure, Protection from Magic, and more than enough HP. Soul Drinker or Divine Intervention, White Potions, teleports, and scrolls all provide even more options by that point.

Having played a party consisting of a Knight, Archer, Ranger, and Monk (Light Side), I can say with bitter experience that they are NOT sufficient. You can maybe get away with a Dark Side monk if you plan to use the Disarm Trap skill.

The Thief means you don't have to eat damage, you don't have to break invisibility, you don't have to do anything except collect your loot and be on your merry way. No distance, no angles, no healing, no running, no temples, no sleeping. No muss, no fuss.

Nonsense. The only serious threat to your healer is the goblins before you've gotten a few more levels, and they are easy pickings if you have bows and common sense. That early endurance is helpful at precisely the point where the healer is weakest.

Sure, but that takes awhile. The starting speed bonus is present immediately.

It takes 9 skill points to be able to get Expert, which is only 2 levels. You'll have plenty of skill points to spare for this "detour" while working on the sorcerer promotion quest, which is required before your sorcerer can Master any elemental magic in the first place.

If you choose Staff, then getting Master can wait or be skipped; the stun isn't that great.

The recovery time might be visible, but it is not very relevant in the long term.

Spamming blaster fire is nothing. Hold down the attack button while not in turn based mode and watch your enemies melt under the never ending stream.

If you are taking so much damage that your cleric can't keep up, then just back out of such fierce combat for a bit and re-evaluate your tactics.

Need GM PfM? Absolutely not.
Useful? Yes.

Ancient Wyverns and Minotaur Lords are melee-only. Exercise some care and kiting, and the only way they are an issue is if you are trying to make an underleveled dash to Mount Nighon or raiding the Maze a little early.

Blood Titans can be avoided or kited if you absolutely have to kill them. It can get tedious in the Titan's Stronghold, but they are a completely optional enemy anywhere else they show up.

The one-time boss fight can be eliminated using quick, overwhelming force. There are a few scrolls in his 'dungeon' that can help keep you on your feet while you burn him down. By this point, every class has one or more of good melee damage, good defensive/recovery ability, ir good magic damage.

Alternatively, just steal from him.

Clerics are crazy useful, but they are not irreplaceable. Same with Sorcerers.

Just listen to Bookwyrm627. They know what they're talking about.

Titan's Stronghold is profitable and easy with rock blast.
If you bounce the rock blast, you can hit the Titans while in a green zone.
The loot is top notch

Im impressed. That is a lot of time and effort to help another gamer. And it says something about Might and Magic players. This is a game that requires some effort.

My attitude will be, if I cannot win through with the default party, then the game has beaten me.