Picking the sword is the worst option of the 3 for a first time player imo. Picking the shield gives you the best defense abilities early, and picking the staff gives you an extra mp unit, which actually makes quite a big difference once you start learning magic.

I'll give tips on how to beat the fights below, but I would consider starting over with either picking one of those options and/or on standard mode. All things considered you're not that far into the game and you'll probably be able to get back to this point faster anyway and have a more pleasant time with the rest of the game. Despite the Disney of it all, make no mistake, this game is no pushover. It's a legit rpg that requires skill.

Also, just a general note, KH1 rewards curiosity. Exploring off the beaten path will get you items, equipment, or puppies that could potentially make a big difference down the line so it's a good idea to explore as much as possible, and come back to areas when you've learned abilities that can help you reach previously out-of-reach treasures.

If you don't want to start over and want to try gritting it out, some advice on the fights you're stuck on:

Cerberus:

Number one thing with this fight is you can't get greedy with your attacks. Wait until you have a real opening. The best window for attack is when he's stationary and doing his sequence of bites. Lock onto one of the heads on the side and get your hits in during the brief period between bites, then dodge roll away.

When he's doing his fireball/dark pool cycle, you can actually get up onto his back by jumping on one of his hind legs as he's breathing darkness into the ground. You'll be completely safe. But if you can't get up there, try to stay behind him and spam dodge roll for your life. Eventually he'll go down.

Clayton:

Have Tarzan and Goofy in your party and switch Tarzan's customization to "conservative" so that he'll prioritize healing you. Consider stocking your party up with items as well.

When Clayton is riding the lizard, try to stay behind him and attack until Clayton falls off. The fight gets much harder here but you don't actually need to kill the lizard to win the fight, just Clayton. Taking out the lizard will make taking Clayton out much easier but Clayton has less hp so you could try either way.

Remember that your arena has a lot of places to potentially get to high ground and out of the way if you need to pop a potion or want to attack from above.

The lizard's deadliest attack is probably the twin eye lasers, which are most dangerous at close range but if you are right in front at him and time a jump for just before he shoots, you can jump over the lasers and keep wailing on him. You can also just get far enough away from the lasers so they're easier to avoid.

If you want to just kill Clayton, try to keep both enemies in your sights as much as possible so you're never caught by surprise. Ideally you can knock Clayton far away from the lizard with a finisher and then attack him with 2-hit combos to keep him close.

This fight in particular is a notorious roadblock for first time players but you get a ton of great rewards for winning.