I know where to start writing. After you leave Harmondale and enter the Barrow Downs, you will very quickly find a large in in the NE quadrant of the map. At the bottom of the south side of the hill is a chest which contains some reasonably good treasure. I found it helped enormously if I mephistoed the chest until it gave me an item of Thievery. With luck, you might find one of these in the Haunted House instead, but it will be much harder work because your party really gets hammered by the traps, as you have found out. I found it made the tunnels under Stone City very much easier, but I was using my archer to do the thieving, and he really wasn't very good.
One thing – after you've found it and closed the chest, be prepared to run like a scalded cat!
Where to go from there is very debatable. There are things in every land you can reach that you can do, and equally, at this stage of your party's development there are things in every land that will get you into deep trouble. I seem to remember that Avlee is one of the less dangerous lands, but there are still areas in there that you will want to avoid. So save often, and keep backup positions!
You will not be able to reach either Celeste or The Pit (The Pit is not the same the The Hall of The Pit) until your party is pretty near being able to cope with them. (I'm putting it like this to avoid spoiling.) Neither one is easy, but I still think that the battle for a Light Path party to get a foothold in the first room of The Pit is one of the finest in the whole MM canon. IMO it's up there with the assault on Castle Darkmoor in MM6.
But all I can say is "Have Fun!". I rather envy you being able to come to one of these wonderful games with a fresh mind.