The first post implies both, in my opinion. So I'll answer both
Plot: I tended to avoid the characters with nearly zilch development. As I'm replaying the game, I'm going through and playing around with more of the characters that have El Nido-specific relevance (A la the Devas, Glenn, Luccia etc.)
Outside of those and the *main* characters (obviously Serge/Kid/Harle), the only other character I find interesting would be Starky. C'mon, he's a friggin' alien.
Battlewise: My first playthrough's final party was Serge/Kid/Riddel, just because Riddel happened to be so very awesome at healing. Excluding that, I never used her again. For power, I tended to go with Serge and Grobyc, as I had no clue how to get any of the other characters and went with the first option I had. Same with Korcha. That gets rid of two potential powerhouses (Glenn/Pierre), so Grobyc I found to be a decent fighter. Also thought Harle was good, especially for her level 5 element tech.
On my following playthroughs, I basically pick at random, but normally finish the game with Serge/Kid/Glenn, as X-Strike's cool >_>.