I'm currently a level 29 Thief with Duke title with Diabolus, Hugo and 2 archers as recruited soldiers. Is it possible to recruit a priest for healing purposes or a mage for offensive magic? Preferably trading against Diabolus because he's weaker than Hugo and I only need one character to receive damage.

as priest you can recruit a priest in act 3. but in that part of the game he is totally useless. he is so slow, that you need to wait every ten seconds till he comes to your position. i killed him myself after short time and played with only two companions till end.

OK.

I would prefer some healing as keeping the auto eat potions my companions swallow them up and I have to return to town and buy new ones or I give them when they need it and it takes forever to advance.

What companions were you using? I know you mentioned priest but consider I use a bow as a Thief they're both at distance.

if you're short on potions you can always use magical boxes. plus you can ask the... guy or something inside the box to heal you before shopping.

I prefer to save magical boxes until absolutely necessary. So far no cheating and I only have used it once against a main quest boss.

I'm usually not short on potions, it's just that I would enjoyed it if I could have gotten a party member that isn't melee or archer oriented, preferably magic with defensive capabilities e.g like healing.