dtgreene: You should not have to attack your party in Final Fantasy 2. Instead, you need to (as I mentioned I believe earlier in this topic) to keep your evasion high by avoiding heavy armor (or even avoiding armor entirely).
Enebias: You should not have, but you still must.
I read your previous post, but I still found (at least, if my memory is correct, as I've played the game ages ago) the game unbalanced, counter-intuitive and frankly broken. FF2 is imo one of the very few games (along with Castlevania 2, ironically) I repute so bad to be totally irredeemable. and taht's not counting the plot ripped-off from Star Wars.
Yes, you can have all the advantages you mentioned if you raise evasion -and I have actually used it, yet when eventually the enemy hits you -because they will, you are dead. If that happens a few times in a row, it is game over. Besides, with the "attack yourself" method I have become almost invincible in the end even when taking lots of hits, so it definitely works! XD
Also, magic sucks, but imo that is a recurring issue Final Fantasy: overpowered in the beginning, useless in the end -except for "buffs" (basically just shell, protect and berserk). Debuffs and status effects never work when they should, anyway (example: why should I be able to poison, paralize or confuse a weak enemy that I could kill in one hit or two and not a boss with thousands of hp? That way, it is just the typical "buff, bash, heal" in circle gameplay. Where is the strategic depth?).
I also remember the "Lawful Evil Capitalist Style" inns: the more you were injured (both in HP and mana), the more you had to pay, making them fundamentally useless. In the beginning of the game, they were almost unaffordable.
The thing is, due to the way evasion works, enemies with lots of attacks will consistently hit you, though they will hit you fewer times. Hence, you can still gain HP from that and enemy spells.
As for magic, there is a way to make status ailments far more effective: avoid using armor (and, in the Famicom version, weapons and shields) that interfere with your magic. If you do this and get Toad (Famicom) or Teleport (GBA) up to level 5 or 6, you will find that it starts working really well. There are a few things to note about this:
1. The spells can be multi-targeted, and still work well when this is done. This allows you to kill more than 4 enemies in a single round. This is unlike damage spells, which do very little damage when multi-targeted. Note that this works better in later versions with auto-targeting; a character who hasn't yet acted will re-target if her target happened to be killed by the previous spell.
2. There are only 2 bosses who are immune (4 if you count the GBA Soul of Rebirth bosses, but one of those can have the immunity removed with Dispel (ever use *that* spell (which doesn't work in the Famicom version)?). Against any other boss, you can turn it into a toad (which counts as killing it) or teleport it away without any trouble.
3. In the PSX/GBA versions (probably WSC and the more recent PSP/iOS/Android versions), multi-target Toad has one of my favorite animations; a bunch of toads rain from the sky while enemies turn into toads and hop away.
For the Inns, you can often save money by casting Cure to heal your characters before sleeping. It is usually cheaper to heal MP in the inn than the HP Cure would restore, plus it helps level up your Cure spell.