I'm most of the way through my second run through of Olifen. It's much easier to win and capture demons with an overpowered party. Although the optional allies start at the same level every time, so they are pretty weak the second time through. The most helpful recruit is Yuri, who acts as a white mage that can cure multiple allies at once (Levatte can only cure one ally at a time).

I've found using human allies preferable to demons because:

1) They don't die permenantly, they simply disappear from the battlefield.

2) They don't consume Poison Points to stay in the fight.