You don't need to level up, as the monsters get stronger (though you can if you want). Just focus on drawing 100 of each and every magic for your 3 characters, and focus on learning the right GF abilities. This will make you powerful.
Whenever you fight, scan the enemies, and whenever there's a magic you don't have, draw 100 of it for all party members. I usually do this rather than fighting battle after battle. You'll have lots of time when you have the mobile garden and Ragnarok to visit good levelling areas. However, if you decide to do sidequests, like the Deep Sea Research Centre in particular, you will level up easily, and won't have to devote time to levelling up.

As well, make sure you get all necessary items during fighting for summoning the Doomtrain, as trying to find Wendigos later in the game to get steel pipes can be a real pain in the arse.