The Xenoblade Chronicles Series Thread: Definitive Edition (All Spoilers in Tags)

[PAOerfulone]

I opted to keep all of the blades a awakened around so that I can have all of their battle and field skills at my disposal and engage the ones that have the skills I need to open a chest, open a sealed door, open an alternate path, unlock a new area, complete a side quest, etc. The more blades you have, the more likely they'll have the skills you need.

As for raising town development:
Spend money, talk to the townspeople, and complete merc and side missions when they appear.