I missed that the limits of the premise do allow them to use magical items they find, but it does state "any magic items a regular party would find along the way"
For my games, until level 5 or a little beyond, you mostly get utility items. Bags of Holding, Soup Stones, Light Coins, things that would just be conveniences. But I don't think a normal person without modern military technology can survive an adventure deadly enough to earn the magical items that would help them survive.
Oh, absolutely. But I think a straight port of a normal person into DnD won't even reach 3rd level.
A Red Dragon Wyrmling is about the size of a Mastiff, with skin as tough as stone, and double the hitpoints given to a motocycle. So, imagine a group of normal humans with spears and axes, facing an armored motorbike equipped with a flame thrower, that can also fly.
Could a group of normal people take it out? Maybe, it is certainly possible, but I will point to the multiple action movies with motorbikes carrying guns, and how many normal mooks are mowed down by those. So, if we stick with an assumption that even Navy Seals have 12 to 16 hp... They are going to lose a lot of people taking down a freshly hatched, CR 4 dragon. Which is about the difficulty I would expect before giving out a +1 dagger, or a wand of cure wounds.