As in Final Fantasy Legend I, you need to compile your party from several different classes/races.

Humans

  Humans are the average characters.  They're pretty good at fighting and they have pretty good defense, but they can be annoying sometimes because you have to keep on buying them stronger weapons and armor.  Their status grows from gaining experience.

Mutants

  You *HAVE* to have at least one mutant in your party (two are even better!).  They're your typical RPG magic-users, with super strong magic abilities along with super weak strength and defense.  Their magic can either attack a group of monsters or all the monsters in the battle.  Like Humans, Mutants gain status by gaining experience.  They also randomly learn news spells, they don't always learn the spells you want.  At times you may have to buy them spells (especially Cure spells) to make up for inefficiency.  Another reason why you must have a mutant (or two) is because Goddess Venus (one of the bosses) can only be weakened by magic attacks.

Robots

  Screw Humans!  Robots are the best characters when it comes to strength and defense.  They don't gain status like Humans and Mutants, you have to "install" their status.  Various status ailments slightly increase each time you equip them with any item.  For example, weapons increase strength and armor increases defense.  Also, you can equip as many as you want of the same type of item.  Its very easy to make Robots so high in defense that attacks don't cause them damage.  So like, since Gloves are the cheapest form of armor, you can equip like 5 of the same cheap Glove and already you'll have rock solid defense.  Unfortunately, Robots do have their weaknesses.  They're totally weak against magic and special attacks, such as Dissolve.  Also, Cure spells and curative items have no effect on Robots, but I do know a little trick...

  When a Robot has low HP, equip and unequip them with any armor over and over.  Their HP increases each time you do that.  The stronger the armors you're using, the faster their HP will reach maximum.

Monsters

  Monsters can be quite tricky to manage.  Whether they grow stronger or weaker depends on the type of meat you feed them.  Obviously, the best meat is of monster bosses, such as Ashura.  Monsters totally change their appearance and attacks each time you feed them.  They are useful at first since they can instantly grow to a decent level of strength/defense, but soon the non-Monster members of your battle party grow stronger.  Then your Monster(s) isn't strong enough to beat a boss or survive through a dungeon.