I actually just completed this part of the game early yesterday morning. I had Locke as my main power hitter, so I killed off Sabin and Mog, (since Locke had Life 3). I killed off those other 2 characters, then when Locke was at about 200 or so HP, Wrexsoul showed back up and I Life 2'd my dead characters, then Life 3'd then to make sure they wouldn't die from the Ice3 and Fire 3 spells that the SoulSavers were casting.

So basically I kicked the junk out of Wrexsoul with Locke hitting 5,000+ with the Ragnarok, the Sabin attacking regularly. I had Counter Attack on Locke to so that each time Wrexsoul hit him, I attacked for another 5,000+. That's how I did it yesterday morn. Good luck to ya!