Lev: In the NES version definitely, certain stats go up depending on level, not actions. I'd hope it's like that on the other versions too (because I personally prefer that method of leveling ^_^).

foa: Only certain classes can use certain weapons. Fighter, Thief, and RM can use the largest number of weapons. Once Fighter gets class changed to Knight, he can use damn near every weapon in the game, and Thief's evolved form Ninja can use most of them. Your White and Black Mages, on the other hand, can't fight with swords, so your best weapons for them are Hammers for White Mages and Daggers for Black Mages. Black Belts should probably use the Wooden Nunchuck or something until their levels get high enough that you can unequip him and he can just fight barehanded.

The class restrictions also apply for armor. Bracelets are the best (and at times, only) armor for Mages, and yes they count as armor (as opposed to something you'd naturally think of as body armor, such as the Chain Armor). You can equip an Armor, a Helmet (the Ribbon, which you definitely want to equip once you find them (only 3 in the game though), falls into this category), a Gauntlet (most of the Gauntlets are only available to non-mages), and a Shield (same as for Gauntlet, though possibly the Buckler (available in Crescent Lake) is equippable by Mages? I forget).

I use too many parentheses.