Now that you have the Titan's Mitt, you can get a lot of helpful upgrades in the Dark World and Light World.
Upgrade the Master Sword
Go south of the Village of Outcasts to where the Library is in the Light World, and you find a frog-like person trapped behind some black skulls. You can lift those now, so lift them and talk to the frog. He will follow you.
Go northeast and use the Magic Mirror to return to the Light World. The frog will come with you and transform into his true form. Go northeast from the Kakariko Library to reach the village itself, then go east via the southeast exit to reach the Smithy. Go inside and go north into the room, and there will be a cutscene.
Go outside, then go back in and talk to one of the smiths. Ask them to temper your sword. It only costs 10 rupees.
Go outside, but be warned that you do not have your sword. Go west to Kakariko Village, then go east again to the Smithy. Go inside to get your ugpraded sword.
Upgrade your Magic Meter
Use the Hammer on the wooden post to the right of the Smithy, then go to the gap in the ledge and fall into the hole below. Go north through the door, and walk up to the red object in the statue's hands. Sprinkle Magic Powder on this object, and the Mad Batter will fly out. After a cutscene, your Magic Meter will say "½" at the top. The Mad Batter thinks that this is a curse, but this actually makes your magical items use half as much magic as before, effectively doubling the capacity of your Magic Meter.
Get a Piece of Heart
Go south from the Mad Batter's room, then go west to the next room. Go up the stairs and through the door to the outside.
Go back to the sparkling spot where you used the Magic Mirror, to return to the Dark World. Go where the Smithy is in the Light World and lift one of the black boulders. Then go east and use the Hammer to pound all of the purple posts into the ground (but try not to hit the Bone Cuccos too many times or you will be attacked). After you have pounded down all of the posts, stairs will appear to the south. Go down them and take the Piece of Heart.
Get a Magic Bottle
Go back outside and go north into the ruined building. This building is NOT the Gossip Shop that a Fortune Teller may have mentioned. For more information about the Gossip Shop, read Where is the Gossip Shop?
In the ruined building, check on the treasure chest and you will find that it is locked. You will then carry it around with you. Be warned that if you hold the A button to dash, you will leave the chest behind. Just check on it to take it with you again. If you lose it, come back to the ruined building to retrieve it.
If you bought information (i.e. purchased some gossip) from the hand-shaped Storyteller in the Lake Hylia area of the Dark World (read Where is the Gossip Shop? for more information), you will have heard of a master locksmith hiding in the desert. That is the next destination. To get there, go south from the ruined house and use the Magic Mirror to return to the Light World. The chest will stay with you. Then use the Flute and select location 7, the swamp. The chest will still be following you. Go west to the entrance of the desert and go north to find the man sitting next to the sign. Talk to him and promise not to tell his secret, and he will open the chest, which contains the fourth and final Magic Bottle.
Get the Cane of Byrna
Keep one of your bottles empty and play the Flute, and go to location 2, the Witch's Hut. Go northeast to the waterfall and go into the hidden cave behind it. Walk up to the Waterfall of Wishing and throw in an empty bottle to get it filled with Medicine of Magic. If your Magic Meter is not full, use the potion now, then throw the bottle in again to get more Medicine of Magic.
Leave the cave and play the flute, then go to location 1, Death Mountain. Go east and enter the old man's cave, talk to him to heal up if needed (he doesn't restore magic, however), and go north up the stairs behind him, then east through the door. Go through the southeast door, then go south to reach the door to the outside. Go west to the ladder and climb up, then go east and step on the warp tile to go to the Dark World.
Go south from where you appeared in the Dark World and jump down through the narrow gap in the ledge. You will land on a small ledge with a door. Go inside. Use the Hammer on the Moles. The room is filled with spikes, so you will have to use the Magic Cape to walk across them. At the end of the spiked path, lift the large block and go north, and take off the Magic Cape. Open the chest to get the Cane of Byrna. This item creates a force field around you that protects you from enemy attacks until you press Y or run out of magic. Enemies that touch you will be damaged by the force field. It doesn't make you invisible, but it uses less magic than the Magic Cape and has a similar effect.
Use the Medicine of Magic to refill your Magic Meter, and use the Magic Cape to go back across the spikes and go outside. Alternatively, if you have a Fairy in a bottle and enough Heart Containers, you might be able to survive long enough to cross the spikes and go outside. Or you can just press Select and choose Save and Quit to start at the top of the pyramid in the Dark World.
Use the Magic Mirror to return to the Light World. Play the Flute and go to location 2, the Witch's Hut. Go northeast to the waterfall and go into the hidden cave behind it, and approach the Waterfall of Wishing. Throw in an empty bottle, use the Medicine of Magic to refill your Magic Meter, then throw the empty bottle back in to get more Medicine of Magic. It is helpful in the next dungeon.
Play the Flute and go to location 3, Kakariko Village. Go to the northwest of the village, and use the exit that is north of the sign. You will reach an area with a large black boulder. Pick it up and throw it, then pick up the white stone to reveal a warp tile. Step on it to return to the Dark World.
Go north to reach Skeleton Forest. Follow the path and you will see an orange Pikit hopping around near some large skulls. It will stick its tongue out toward you and try to steal your shield and other items. If your shield gets stolen, quickly kill the Pikit before it can steal anything else, and it will drop your shield upon defeat. If it steals something else after it takes your shield, you will have to purchase a new shield. Read My Shield Got Stolen! How Do I Get Another Shield? to find a list of shops that sell shields.
There are five different places where you can enter the next dungeon from the Skeleton Forest. If you want the Map and Compass, go north from the Pikit and the three large skulls to find a hole. Jump into the hole to enter the Skull Woods dungeon. If you don't want the Map and Compass, go east from the Pikit and the three large skulls, walk past the hole by going west along the south side of the hole (hold the sword button to charge up a spin attack to cut the bush in the way), then go north and west to a pair of ribcages. Go north through the first ribcage, then south through the second, and go into the open skull to enter the dungeon.