Okay, these have been sorta covered but I'll offer some answers of my own anyway. :)
Yes, you start each game completely from scratch. However there is a little bit of permanent progression in Awesomenauts - as you level up, you will unlock more of the Upgrades for use in game (so when you first play you will have fewer options as to the loadout you can take into game).
When you start a game you pick your loadout of potential upgrades for that character - 3 for your basic attack and each skill and then 3 general character upgrades. However, you will not start the game with these. Awesomenauts is fairly simple by MOBA standards (so it's a great introduction to the genre) and the only way you progress your character during a match is by buying upgrades.
Your "level" in game is a somewhat misleading statistic - there is no experience per se, it is simply a measure of the amount of Solar (money) you have collected. This is earned passively (30 per minute) and you can also pick it up when dropped by enemy players, enemy creeps, enemy turrets, or neutral creeps.
The general trick to levelling up quickly in Awesomenauts is to stay mobile - not too unlike other MOBAs, you want to always be doing something. If you have cleared the enemies creeps and the opposing heroes are not easy targets, pop into the "jungle" (neutral areas) and kill the small creatures there (they will also drop health, which can be very important). If you are on the Ribbit IV map, you can also kill the Solar Bosses (the large dudes in the jungle) once you get more powerful for Solar and a full heal.
Generally speaking I'd say Awesomenauts is more PvP-focused from the get-go than your average MOBA - farming creeps is slightly less useful than being able to take out enemies. That said it's still a good source of income, so don't rule it out. And as Corvak said - try not to die! Not only will it give the opponents Solar, but you will waste all that time while your respawn timer is ticking down that you could have spent earning Solar yourself.
Don't be afraid to hide behind a turret and teleport back to base if you're feeling under pressure (and remember that heading back to buy upgrades before your opponent could help land a cheeky kill if they have yet to do so).
Hope that helps! Any other questions, feel free to ask!
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