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The Girl will leave you when you go to here but feel free to explore the village, there is a quest that you can do here, go to the top floor of the Inn at night and talk to Bessie the Third, he'll give you 100 Lucre for every blood pouch that you give him and if you give him 10 you get a piece of Dudbears Gold (important for later on). There is also a General store where you can exchange money for items (you get money for killing any monster).

(Hero) Go into the house on the left when you come in from the south, the man will think that You're a Heretic hunter, go outside then after the lengthy dialogue he invites you in he explains about the sword of Mana, you need to go to Wendel first, then he gives you the Magic Rope, exit to the West to get there, they you will be pestered by Niccolo and made to buy his notebook, it's 10 Lucre so it's cheap and if you don't have the money he'll give it to you, then go to the house North of your position, now go to Cascade Cottage.