Fighting all of the foes you see will keep you at a comfortable exp level. A lot of the battles are optional though, so if the game isn't challenging you, you can skip them.
ENEMY GROUPS
Wooden Idol #1: Two Wooden Idols
Green Bush: Two Green Bushes
Wooden Idol #2: One Wooden Idol and one Green Bush (guards Chest #3)
CHESTS AND SECRETS
Chest #1: Gash Club (sword), 2 Lanky Root, 4 Gash Nut (requires Axe to reach)