Fairies in this game IMO have way too many restrictions to pull down their benefits(extra AC and SP regeneration). Their carry capacity debuff would make them terrible Bards and Gadgeteers, not able to carry a lot of instruments and gadgets. Also, I like to load up my pure casters with Mana Stones, which refill SPs as well as increase the Artifacts skill. Eight of these in personal inventory would weigh them down too much.
My Priest and Alchemist have decent armor choices, for casters. They can wear the Studded Hauberk and Stud Chausses, the heaviest light armor(available in Arnika), which I'm not sure that Fairies can equip, and even if they could, that would weigh them down I'm sure.
The Human emerges as the most balanced race, with the most attribute points available. It kind of fits into the theme in Arnika, as Higardi are the closest thing to Human. Vi Domina and Myles are Humans, so it's easy to form an all-Human party early. If you're patient with them, they will have the best attributes for a long game.
My Human Psionic will have Intelligence, Piety, Speed, and Senses maxed by level 27. His other attributes start at 45 already, so it would be easy to get them to decent level by around level 30-35, enough time for the end game.
I just got my pure casters to level 20, which allows them all to cast their level 6 spells at PL7. They can cast their hit-all level 7 spells safely at PL3, which might be weaker than lower level spells. It will still help build their magic realm skills, however. Arnika has plenty of high level, high experience monsters to farm experience from.