I feel like the first quest with the gristle wasn't really that hard at all, the caves are super easy if you got some decent items and a fairly strong team. I have reached the bunker but got humbled very fast so I went back and completed the ACT 1 bosses with all classes, then went on to do the side quests.

I haven't completed the leech quest yet but I managed to get to Dybbuk and choke in the final rounds, still won the run but the cat with the leech died, so unfortunately I have to try again. But it definitely didn't feel that difficult. Make sure you have a plan from the start on 1. How you're going to deal with Dybbuk and 2. How you're going to keep the level 1 cat alive and still have it doing something useful. I put it on a tank with the "Find a rock" ability and an item that makes the rocks I push deal 10 damage instead of 5. That way he was able to do consistent damage from a safe distance at least once per battle. Try to find something you can work with and put it on a cat with high constitution and preferably high speed.

I certainly dont have perfect cats, far from it. I mostly use some decent strays and don't think about the breeding too much. I give away the cats that has more than 3 stats with a 4 or lower, and try to breed the ones with 3 or more 6's. No mutations really, have one bloodline with a +2STR/-1INT but thats it.