The difficulty seemed absurd to me, too, the first time I played the game. This time I began seeing the fun once I began discovering a few things the other day, TL;DR at the end:

• Keeping your cloak stained seems key; blood is good and gives you increased crit chance, but water is usually easier to keep soaked. As long as you have that, you won’t go up in flames in fire or explosions. And water/blood can also wash off toxic sludge, oil, etc. so it’s really important to have a bottle of it on hand to shower yourself with.
• Adding onto that, if you have a bottle that has empty space and you are holding it in a pool of a liquid, it will fill up with that liquid.
• Kick everything! It’s super fun to kick explosive barrels or lanterns all over. I bound ‘ctrl’ to kick so I can more reliably kick.
• Drink everything! You can right click on bottles in your hot bar to drink them, or you can press “s” to drink the liquid you are standing in. There’s some fun reactions, though most just make you vomit.
• Tapping space to keep upward momentum > holding space.
• I had the best luck sticking in the first area and getting familiar with those enemies. I like to have 3-4 wands before I go to the holy mountain and as much gold as possible (my best run I had like 600 by the first, bought lots of spells). To the left there are the mines. They have more gold, but stronger enemies.
• The chainsaw spell is great, you can emulsify enemy corpses for their blood.
• Chain bolt is really good if you can get it, that carried me in my best run so far.
• Oh, also read the spells a wand has before using it. Some spells will hurt/kill you if they’re not matched with something that casts them away from you.
• There’s tons of enemies, loot and areas to discover. The coolest part for me was finding a way to return back to previous layers once I had better spells.

Anyways, it’s still masochistic in nature. My best run came to an end abruptly and unfairly.

TL;DR: Be slow and cautious, play around in the first area to get better gear and understanding of the mechanics.