I managed this on a solo playthrough recently without using the gunpowder barrel. I did it as a Paladin/Chanter with basically every single one of Berath's Blessings, but most of the advice should still apply. Think I was level 6 when I managed it.
There's a small area on the eastern side of the map, just above the Foreman's Quarters where I pulled the pack towards. Pulling them up there has a couple benefits. First, it splits the pack, you'll still get a load of mobs, but the wurms didn't seem to follow. Or at least it should, it's kind of finnicky and I haven't quite mastered the art of splitting packs. Mostly I just stealth up, intentionally get spotted on the edge of their detection radius and bolt for the nearest chokepoint. Second, when positioned correctly your tank only needs to engage two things at once. Probably two panthers or a boar (I can't quite recall).
The downside is splitting a pack of mobs usually means you're stuck in combat. That can be pretty rough, since your fighters' Constant Recovery will run out and you're left doing half the fight with fewer resources.
Once you've managed a good pull and aren't overwhelmed by mobs seconds into the fight, I think your goal should be to take out the drake without letting it hit you too much. So have Eder just smack some cats around while you and Xoti ping the drake on the stairs.
If you need another character, I'd recommend a Chanter with Come, Come Soft Winds of Death and White Worms Writhed in the Bellies of the Dead. That'll provide you some passive healing and a pretty decent AoE (which requires a corpse, but you should be able to make a couple) that deals a fair chunk of damage to the drake.
Now, as far as Gorecci Street is concerned...Haven't managed that one. I did find a work around by accident. If you leave Port Maje, then re-enter and go directly to Gorecci Street, you'll enter on the south side of the map with plenty of room to move past the looters. I just took the opportunity to talk to whatshisname for the quest and ran off to do other things (also learning that if you convince him without killing the looters, they die). I didn't really think of it at the time, but since you have more room to maneuver on that side of the map, you might be able to split the looters up and actually take them down. At the least, you'd have a better shot from there than when you're surrounded by all seven of them.