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Undead is chosen at level one because of XP-rich low to mid-level quests in House J where the Undead are the main Mabinogi online gold villains. Besides, there's a whole area that the Undead consider as home: Necropolis.
This means that you can only get your Dexterity to certain level and not maxed out. There's no need to be bummed about this because you can get a +2 or +3 Dexterity tomes as you keep playing.
However, if you feel that your AC is enough to withstand attacks, then you can replace Toughness with Power Attack for additional damage when you hit. If you are sticking with Toughness, the Elf Melee Damage enhancement is enough to compensate for the lack of Power Attack.
Rapier is a light weapon and will be more effective if used with a Dexterity-based ranger. The Kardin's Eye in the Beholder room in Prison of the Planes (PoP) quest is also something that you need to get.
Since you are not too concerned about AC, then a rage potion or spell can even increase your strength to 30sh level. That's not so bad at all. In fact, it's quite high for a support melee.
Note, however, that enroute to the entrance, you will encounter cultists and archers. Expect to get hit from all directions.