Strength definitely matters; it increases both your max hit and your ATK, meaning you tend to hit in the higher part of your range more. IIRC the last time I parsed it I got an extra 1% damage for every 6 points of strength. At high levels with the Fist/SoS bumping my strength increased my dps from ~60 to ~70 (15% damage from +80-90 or so).
The real question here though is why are you taking so many hits. Even in indoor dungeons you should be able to tag with shuriken and strafe away to avoid being hit much, and at 27 you don't have to deal with FD memory so splitting should be relatively easy for you. During combat FD is fantastic for taking you down the aggro list. Casters will destroy you but at your level there is really nothing you can do about that with the current 500-max resist system (at 50+ the resist buffs get better, your gear gets better, and they become relatively lower level so you can start to actually resist some spells).
My suspicion is that you are solo and wondering why you can't mow down the zone like supertwink x, and the answer is the fungi tunic is disgustingly good at those levels.
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