Don't worry about losing insight. That stuff is easily replenished through chalice dungeons. Also which area are you talking about? You probably mean Upper Cathedral Ward right, and not the workshop, cause there's like 1 squid guy in the workshop.
Also if you're using the katana, you should know that one of the best attacks with the katana is to transform, but in the middle of the transformation, while it's in the sheathe, do a light attack. This will cause you to do the transformation attack witohut needing to do another attack before it.