Juzou the Drunkard wrecked my shizzle so many times.  What makes him so hard are all the mooks hanging around.  Steerpike pointed out that you can take these guys out, one at a time through stealth.  I quickly realized in this game that stealth is way OP, to the point that it can become a crutch for your skills.  However, in this case there's really no other way than to thin out the ranks so you can take on el-fatso 1-on-1.  I quickly abandoned the idea of keeping that AI ally alive, and after a while I completely ignored him.

Here's the thing with Juzou: he's fat, and he's slow.  He hits hard but his tells are obvious.  You, on the other hand, move fast, and hit fast.  Stick and move.  And make him pay for taking a swig.  There are two crucial skills in this game: jumping over sweeping perilous attacks (the ones with the red kanji) and Mikiri-countering the perilous thrust attacks (it's difficult to think of a more satisfying move than stomping on a tough opponent's blade).  But most importantly, reading the tells to know which one of those is coming, because some jerks do both.  Juzou only sweeps (well, he grabs but just don't get grabbed, fool).  Jump over his sweeps and punish them with the follow-up kick for posture damage.  Or just play it safe and stay out of their way since the arena is plenty big.

But if you want to semi-cheese him, read on.  You can stealth back-stab Jouzou, and you don't even have to clear out all the rabble to do it.  Get his attention, then run away into the water, but don't go too far or his deathblow markers will reset.  When he turns around, sneak up and back-stab.  Repeat.  Then go cry in a fetal position after Lady Butterfly tears you a new one, ha ha, j/k.

One last, key point that may be obvious to everyone else but didn't dawn on me until very late in my play-through.  You only lose experience from an incomplete bar.  If you have those numbers to the left of the blue bar "banked", they can never be lost.  So only go into tough fights when you stand to lose very little.  And oddly enough, the more you die, the less you subsequently lose since the bar drops by half.  Since some of the later skills cost five or more experience points, using this strategy is important.  Sen is another thing: you can lose it all.  But you can also bank money by buying those coin purses from merchants.  And get Mikiri Counter as fast as you can.

Edit: The soil-yer-pants snake was pretty cool I thought.  The mounted boss after that is, I believe, supposed to be your first proper boss.  He was one of the few bosses that i killed in only a handful of tries.  And it only took as long as it did because I thought I had to jump up and hit him and not his horse.  This reminds me of another way in which this game is thoroughly Miyazaki: revisit areas often, and explore every nook.  It's so easy to miss things otherwise.

Edit edit: I'm pretty certain the emphasis is on the first syllable: SEH-kee-ro