What am I supposed to be doing?

I’m doing the quest where I meet the red robbed lady on the nameless pass, but I don’t have enough gold and resources slots to pick new items I find, including resources to makes heals. I’m in a area where goblins are shooting red blast cannons at me. I can’t heal or repair my gear. Enemies aren’t dropping any money.

Am I not supposed to be doing this quest?

I had a similar problem when I first tried it, I think I was very underleveled. I just made a new realm and breezed through it. The next time I got there it was easy mode.

Alternatively go back and farm the shore, but might as well roll a new realm at that point.