SummonerYuna: Thank you so much for responding. Yeah, the game I'm currently playing is MM1. It's just that I encountered a red dragon and it totally obliterated my characters, so I thought skill potions might help. But I decided to do some of the Lord's quests and grind my way to level 13 so my cleric and sorcerer can have their last spell levels.
Gaining levels in MM1 is super useful, it basically makes your characters better at everything. Better chance to hit monsters, better damage, at certain thresholds you get extra attacks, and your casters get higher-level spells. So skill potions can really help.
Having said that, I never really used them when I played. If I ran into something too tough, I would just try exploring somewhere else until I'd gained more levels. There are certain repeatable quests that give lots of experience (there are hints about them written on the statues in Sorpigal) and there's almost always a different place to explore if you're having trouble.
Red dragons are no joke; you definitely want high-level spells for those. Lords' quests are a good idea if you haven't done them yet, also try exploring other places if you haven't been to them before. I think I'd basically explored everywhere by the time I tried tackling dragons. They're definitely endgame enemies.