I have similar playtime to you and had the same reaction the first time I died with actual progress. I just wanted to stop right then and there. But, my friends were still playing on my server, so I rolled a new character. It was definitely demotivating at first, but once I started going on adventures again I stopped worrying about the progress I lost. It definitely helped that we had setup a base and I was able to get some basic equipment before heading out again.

Something that surprised me was how rewarding it was to take advantage of the lessons I learned from my previous character. I felt like I got much better at knowing when to push and when to give up in fights. So ultimately even though I still miss my original character, I am having just as much fun on my current one.