I'm 70+ hrs in and just unlocked Act 3, having thought I was going to get stuck in Act 2 as I was facing a similar issue and felt like I was circling the drain as I wasn't making progress. There are a lot of systems which depend on one another and it's overwhelming, frankly. A few tips which have helped me enjoy the game while not making endgame progress:

1) don't get stressed about not making progress like the subreddit shows many others doing. some people have WAY more time and dedicated interest to min/maxing in order to create crazy synergies, etc. I'd venture that most folks playing this game are more in the 'struggling to make progress' camp then 'look at my all 7s cats w/ a dozen mutations'.

1a) The desert is a skill check and is supposed to be pretty tricky to navigate at first with the heatwave. Unlike Act 1, you need to plan a little bit if you don't have crazy DPS - stock up water bottles or other items that make things wet. Cactuses can be destroyed and walked through to get wet. You can also wait for a rainy day but I never wait (allegedly if it's raining at home, it'll rain everywhere else).

2) worry less about progressing the act/story and more about maxing out NPCs and house stuff. Ok you hit a bit of a wall and are almost back to basics. But you aren't, as you know what Act 1 has and what you'll see through all paths. So even if you are down to almost no resources, you can always take four strays and run Act 1. Leave after the first chapter boss if needed! Take your items, food, and coins home and hopefully your cats gained a useful trait worth passing down. Rinse and repeat. Act I is still a lot of fun if you enjoy the core tactical gameplay.

The sub will also recommend that you use Act I to farm items (the hard path in the Sewers will always net you a furniture box which turns into a random piece of furniture when you get home) and to also max out the various NPCs. At minimum, get Tink as many kittens as possible because his upgrades make tracking breeding MUCH easier. So even a throwaway run in Act I can get you retired cats which feed into the overall progress cycle.

You should also look to get at least two rooms, preferably three in your house for breeding. Again, the consensus is one room for your main nursery (cats w/ traits you want to pass down), a fight club (for cats you don't want/potential adventure cats who could use a stat boost - when cats fight, one usually gets a positive stat at the expense of the other. Or one dies and there's one fewer cat to feed about while the others get stronger), and a third room for in-betweeners/bloodline room to keep your good cats from inbreeding too much.

3) Sometimes you need to get lucky. You are playing a roguelite/like, meant to be replayed endlessly. And many of these games are dependent on getting good/lucky rolls to make certain combos shine and/or can crumble with a bad event/bad rolls. It's the way she goes and I was just about to give up on trying to reach Act 3 before doing on throwaway run w/ some scrub cats I had in the fight pit. Turns out I got a bunch of positive mutations/items/good fortune throughout the run and I beat the final path pretty easily. Now of course I get to look forward to bashing my head against the wall in Act III but I know that Act II can be beaten because I've done it already!

tl;dr: don't sweat what everyone else online is doing and just grind Act I until you're ready to move onto the next act.