i'll give you a little help here, but i'll also recommend a similar thing, which is to check the help file (faq's there answer one of your two main questions). another useful place is larkinorguide.com/help as there is a wealth of information there on this game.
anyway, on to your problems... in most fights (not in missions/quests, but you're not likely at them yet) you are allowed to run from monsters, and if you won't win, it's recommended to do so. however, they will get one more hit as you run, so plan ahead, and figure out if you'll likely win or not. the "run" button is located below the monster image in a fight.
as for getting disease or poison, those are called calamaties. eating rations will sometimes cure poison. but the easiest way to get rid of these and other calamaties is to go to the temple (one located in city centre, one in the graveyard in the south-centre of the island). in the temple, you can pray to get rid of them.
back to dying... if you die without insurance (which you haven't likely purchased, but can in the temple... and you should when you get enough money - 10 times your level - and yes, you have to re-buy it after every death, an even more important reason not to die)... anyway, dying without insurance will lose you all items and money in your pack and you'll only have the weapons/armour that you're holding left. dying with insurance will protect you from losing anything, except about half the money you are carrying (all items in your pack will be safe).
so... to summarize... don't die. and if you do, go back and immediately buy insurance again. and as you proceed, you'll obviously have more questions. the faq's in help or on the site mentioned above are great tools. often there are people in chat who will help out. and also on larkinorguide.com you'll find maps of the island, a tool in the "tools and articles" section that will tell you the best armour/weapons for a character of your level (good to check each new level you reach), and a TON of other stuff. it's a text-based game... have to expect some reading to find out all the interesting things about the game ;)
--jason