should have folded pre-flop, that early in a SnG never play those hands.
This is correct.
Given that you have played it, you need to play it harder on the flop.
All your chips should be in, probably on the flop unless he just flat calls a 3/4 pot bet, definately on the turn if he slow plays his set.
Your play on the river is horrible you have to realise you're beat here.