Less characters, with more development each.
Maybe two/three characters of each element are available per playthrough (Without counting Serge/Lynx)? ie:
White: Serge, Riddel
Black: Lynx, Harle, Grobyc, Guile
Blue: Pierre/Nikki, Fargo
Red: Kid, (Who else was important? I can't remember any other red with plot significance. Then again, there's always Macha
)
Green: Radius, Glenn/Razzly (Depending on save/leave Kid), Karsh
Yellow: Norris, Viper, Poshul (If for nothing else, just making the opening segment easier; maybe permanently leaves party after Opassa Beach?)
I know I'm likely forgetting some important character or another, but at least it's a basic list of characters. Zoah/Marcy never join the party, but we get Viper/Fargo anyway, so we don't need them. The only concern I can think with the list as a whole is not having any Red characters besides Kid, though I suppose adding Zappa might work.
The biggest "problem" I see is the lack of early-game characters by removing Leena, Mojo, and (Likely) Poshul; that leaves you with Serge and Kid until Termina, and then those two plus your guide for Viper Manor. Then you'd have Serge/Guide/(Glenn/Razzly) until Ft. Dragonia, and then get about ten characters in the span of twenty minutes after becoming Lynx.
I dunno, that's my two cents being written up at seven in the morning, so I imagine there's some glaring error on my part >.>
EDIT: On second thought, Grobyc and Viper could probably be removed without incident; Viper isn't important to the plot after recruiting him (Or past Ft. Dragonia, really), and Grobyc is relevent never. Maybe we could leave Poshul in, then? Hardly a plot-heavy character, but without Viper we need another Yellow, and Poshul offers potential variety for early-game parties.
Also, I forgot Sprigg, which means we'd have four green characters per run, five total. Still, with this list we're looking at about 16-17 characters as opposed to forty-something (44 I beleive, but I don't know if that counts Serge/Lynx as one or two characters), which is a nice start.