How is Willy a (tragic) hero that goes through the 12 stages of a hero's journey? When compared to Hamlet, he does not seem to be a hero at all.

Willy Loman is a modern hero whose course of action differs somewhat from that of the classical tragic hero. On his journey, he makes many missteps, either through having the right goal but choosing the wrong action by which to achieve it or just plain doing the wrong thing altogether. It is through his wife, Linda, that we see many of Willy’s positive characteristics, some of which he had long ago set aside. The words Arthur Miller gives her (“Attention must finally be paid to such a person!”) enforce the idea of Willy’s greater significance.
It could be possible to trace 12 discrete stages of Willy’s journey if one began at a point in his life earlier than the action of the play. As the title indicates, the play is concerned with the end of his life, but flashbacks and the other characters’s dialogues fill in the gaps.
Turning again to Linda’s words, we find mentions of some of his heroic acts, trying to help his sons. In his younger days, he had some success in sales: “He used to be able to make six, seven calls a day in Boston.” Although he no longer does so, he tries harder and travels farther, despite the frequent futility: “He drives seven hundred miles, and when he gets there no one knows him anymore, no one welcomes him.” Angry with the boys for attacking him, she demands: “And you tell me he has no character? The man who never worked a day but for your benefit?” Willy’s efforts to help his sons have largely gone unrewarded: “When does he get the medal for that?”
Each reader or viewer can decide if his last actions are heroic—if he gets a medal—given that his motive was to provide for his family. The 11th stage, resurrection or the encounter with death, is certainly represented. Is the final stage of the return, coming home a changed person, depicted here? Perhaps in the attitudes of his sons, which we are led to think may have changed, Willy finds completion after death, though it had escaped him in life.
Soon after writing the play, Arthur Miller explored precisely this topic in the article "Tragedy and the Common Man" (1949). Aiming to portray the common man as a tragic hero, Miller believed that

. . . the tragic feeling is evoked in us when we are in the presence of a character who is ready to lay down his life, if need be, to secure one thing--his sense of personal dignity.
http://movies2.nytimes.com/books/00/11/12/specials/miller-common.html