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Bandorr said:
The progression in this game makes no sense to me.

I have all eight characters. I have all 8 shrines.

My highest level is 17. Because I can't sub that character out. Everyone else is like 15, 14, 13,10, and a couple below 10.
Based on the map chapter 2 the towns range from level 21 to 27.

So what the hell am I missing? How do my characters go from not even 20 to 20 to almost 30. Am I suppose to just grind that?

No, you're supposed to decide on a team and stick with it, so that most of your XP gains go into the same 4 party members. Also, if you are using the passive ability that lowers random encounters, turn that off, because it also lowers XP gains. Oh, and be sure to finish most of your battles without getting touched. Also, be sure to challenge anybody that is worth fighting for the XP. 

Finally, you can go to level 15 areas on your way to the chapter 2 towns and quickly grind out a few levels. Win about five or ten fights in those areas and you'll jump from level 10 to level 17.