I was hoping for a skill or spell like invisibility in other games that lets you sneak past monsters. It looks like Chameleon is such a spell. Unfortunately it seems neither this nor the CC spell Insanity is available to my party, because I am running a pretty classic party with a Mage and a Priest.
The Terror spell is your low level Insanity substitute. Your Mage knows it. Use it!
Also, "stealth" is a thing whether or not you have Chameleon running. On Arnika-Trynton Road, you should always be able to see enemies at a distance and they will
not come straight at you just because there is line of sight; they have to be close enough. If they
are coming towards you but combat hasn't started yet, simply back away to stay out of "trigger range".
Enemies are almost always on their way somewhere - watch what direction they're moving in, and don't be there when they get close. Even in a straight corridor, you should be able to backtrack and hide in a side passage, branching road, other room etc. to let them pass. Trynton Road has plenty of loops and side roads to sneak around on. Of course you don't want to hide from everything, but you
can pick your battles. Absolute worst case, if something is too tough to fight and you can't dodge around them, leave the area and come back later - spawns are random and when you return there will likely be something different on the road. (Note, leaving the zone and coming back immediately will
not reset spawns. Be patient and go explore somewhere else.)
Lastly, even in a bad fight, running away (even from crabs) should work.
Make sure you are using the Shift key to sprint. Sure, if you wait too long to retreat, your whole party may be killed, but if one or two party members die, you should have time to escape. Bounce back with some Resurrection Powders (always keep a small stockpile of these .. if you made it to Arnika, you should have enough $ to buy at least one or two from the temple). Note it is OK to carry a dead party member for a while and build up money to buy a resurrection item, not the end of the world. Don't blow all your gold on shiny new weapons if you don't have any resurrection items.
Be very careful about using Resurrection Powders in combat. Your party member will come back to life with like 2 hit points and may immediately die again. Often it is better to run away first and resurrect somewhere safe so you can rest and heal up. Or just finish the fight without that person and resurrect them afterwards.
Also, you said something about never resting. Don't be dumb. Resting should be your primary means of replenishing hit points, and more importantly, spell points.