So how do characters this squishy survive in a dungeon? Well, it's not always possible. Sometimes you get ambushed by something huge and invisible and silent and unfair and you just die. But you can increase your survival odds greatly through two easy steps: Be Less Squishy and Use Better Tactics.
Be Less Squishy
2. Via hit points. Sometimes you don't have the 10 points to buy a whole point of ST, but a HP is only 2 points. Even one extra HP would have made this 18 HP blow not a death check.
3. Via better HT rolls. +1 HT is 10 points, pretty expensive. Fit gives +1 to HT rolls for 5 points. Hard to Kill gives +1 to death checks (only) for only 2 points.
4. Via Luck. If you do everything else right but roll horribly, Luck can save you. Unfortunately, Luck only works once per hour, so it only saved Holly from the first enemy, not the second.
5. Try not to die with unspent points that could have saved you. There's a tradeoff between saving earned character points to buy expensive traits that you really want, versus spending them sooner on minor things that you desire less. In the long run, the expensive things can be worth it. But if you die before the long run comes, the fact that you were most of the way to affording +1 DX doesn't matter. Especially if a character is super-squishy, I'd go for cheap quick survival bumps before saving up for major upgrades. Eventually you run out of cheap options (you already have Fit, your HP are as far above your ST as allowed, your weapon and shield skills are high enough that you can't raise your parry or block by only spending 1 or 2 points, etc.) and then saving up for the big ticket items feels more reasonable.
A note for the Whiterock campaign in particular: I often allow trading in small upgrades toward bigger upgrades. Like, +1 HP and +1 Lifting ST and 5 points gets you +1 ST. So, there's less of a penalty for "wasting" points on small upgrades in this game.
Of course, nobody ever has enough points to buy everything they want. Tradeoffs are hard. This is where much of the player skill in GURPS comes in.
Use Better Tactics
2. If necessary, wait for your slower allies in turn order. Being both squishy and fast is a trap, because everyone wants to do stuff all the time. Slowing down and waiting for your slower allies to move up so you can hide behind them is less fun than doing something fun right now, but more fun than being dead.
3. Pay close attention. If an enemy with a 3-hex weapon announces a Wait, you probably don't want to step within 3 yards (or maybe 4 yards if the enemy can Step) of it until that Wait has expired.
4. Think twice before using Move and Attack. It's fun to get to attack more often, but Move and Attack caps your attack roll to 9 or less, so you're probably going to miss. In exchange, you lose your ability to retreat, and you lose your ability to parry with the weapon you used to attack. This is usually not a good trade: you get a crappy attack, and then your opponent gets a better-than-normal attack. Of course, it's fine if the only enemy within range is stunned.
5. Think three times before using All Out Attack. It's fun to get +4 to hit or +2 to damage or an extra attack. But if you don't take out that opponent and they get to swing back, having no defenses at all can get you killed. Of course it can still be a good move, if your opponent is already disabled or you're so beefy that your opponent can barely hurt you anyway or if you absolutely must take down your opponent this turn before it rains unholy hellfire down on the helpless village. But, most of the time, it's not.
Of course, one of the great things about RPGs is that you can always make another character. (And you can sometimes afford to get your dead character Resurrected, but unfortunately the PCs in the DF Whiterock game aren't that wealthy yet.)