Villa made a great start against the Imps as John Carew opened the scoring on five minutes. But second-half goals from Janos Kovacs, Lenell John-Lewis and Ben Wright gave the hosts victory.
Villa return to competitive action with the Intertoto Cup trip to Denmark on Saturday and O'Neill told avfc.co.uk: "We're trying to get ourselves right for the game on Saturday. We're trying to get as many senior players as much time out on the field as possible - without getting injured.
"I know it's a friendly game but you'd prefer to win it than lose it. Again it's a matter of getting a bit more fitness.
"We're trying to cram an awful lot into this 10 day period because we want to get into competitive mode very early on. Saturday's game is vitally important to us and this was part of the build-up to that."
The Villa boss continued: "I felt Lincoln played very well and gave us a few problems. I think we can sharpen up immensely. Last Saturday we were a wee bit untidy and tonight we were similar.
"We started off brightly enough and got ourselves a goal. After that we were making changes all the time, so it was hard to get any free-flowing movement. But the idea is to try and get as many players as possible fit.
"I wouldn't be overly concerned about pre-season games. I remember when I was managing Wycombe Wanderers and we used to get fantastic pre-season results against the likes of Chelsea, QPR and others but we found the opening day at Carlisle as difficult as fixture as you're likely to get."