I am usually at Level 6 by that time, but that's because I sit there and fight the same Spinies over and over again at the end of the Mushroom Way level until I get to like Level 4. It's boring, and you don't need to get that high, but I'd say get Mario above Level Two before facing him and buy some syrups so you can pummel him with your Fireball attack (that hurts him AND freezes him for the next turn).
"We took pity on him because he''d lost both parents at an early age. I think that, on reflection, we should have wondered a bit more about that."
--Lord Downey, Terry Pratchett''s "Hogfather"