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That would be the Demon Dice item, pretty much the most important in the game. It is ridiculously broken, and you will almost always want to open combat having every character use it. For the cost of 50% max life and disabling of items for some # of rounds you get teamwide buffs like 2X attack or 2X defense. You should have it because if iirc it's given for beating the succubus Veronica along the main storyline.
Might as well do all the fights against the boss teams as it's fun and challenging to see them again. I believe some of them, especially later ones, give best in slot armor. They were a lot easier with the old Illia though.
Down in the abyss layer there is a dragon king that drops 10 fiery nuclei, which is enough for a legendary weapon. You can choose or not to grind the rest of them after that.
I use M3 as magical because I'm using physical Litis and it's nice to have both types of damage when enemies might dodge/counter/reflect one type, but I'm not claiming this is necessarily optimal. My setup cleared every fight in the game without excessive grinding or cheating, so it's good enough for me. Try out different loadouts and see what you like.
Also attention: 坑神, the library of enemies isn't remembering the enemies encountered prior to this version.