I like to leave the M at L5 for parties of three or more, but with enough XP saved up to advance to 8th for a party of 3 and 7th for 4's.
The first 2 games i finished, with parties of 6, i did develop everyone to L10 in the Monastery, but they were imports and started with 5 free levels.
Solos all ended up leaving the Monastery at L8 with enough points for L10. (these were developed in there with extensive fights against Met. Slimes, whose drops were quite a boon...) and Duos were either like Solos or leaving at 7 ready for 9.
The mobs are pretty much evenly matched if you do that. (and don't camp long enough to let them respawn!!!) I haven't been overwhelmed since i started doing this, and i've taken at least 100 parties at least as far as Arnika.
Of course, this may be skewed from your experience, because i always do Stealth for everybody at L4/5.
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