Best advice I can give you is invest in spells like sleep, stop, slow that affect many enemies at once and spells that boost/defend your party. Forget about attack spells like fireball, at least in the beginning, although magic missile has saved my neck a few times.
It's also a good idea to have a bard in your party as they don't use up mp when using an instrument. And instruments can be used over and over again, no ammo needed. And Hobbit bards make good rogues.
You should have a Mook in your party.
You should have a Ranger in your party.
Also, don't forget that you can change classes anytime. But plan ahead for each of your characters because each class has requirements that could make it hard for a tank to turn into a Mage. But it's possible.
My starting party is usually made up of:
Hobbit Bard
Dragonic Fighter
Dwarf Cleric
Pixie Wizard
Mook Psychic
Felpur Ranger
Except for my Psychic and bard they all switch class to allow more variety in skills/magics.
When travelling, stay close to the "walls". When attacked you're much better off in corners than in the open. Sleep in small holes and crevisses and in your formation, keep your spellcasters and long range fighters in the middle/back, keeping your back rows against the "walls" in the environment.
Oh and the underwater monster is killable.
Good luck.