Southern Town is filled with Slime type charcters. In the back of the town is the woman the King of Armor spoke of. She explains that she turned down the king because the Bandit of the Bandit Cave said he'd destroy the town if she didn't marry him.
After visiting the Bandit's Cave and defeating the bandit, the girl will thank the player for helping. This plot point is totally optional, and the town is not required to be visited in order to continue the plot.