Anything more than 5 levels below you should basically be no threat.
Anything 5 levels above you should whack you for half your health.
Status effects have 100% success rate on player characters.
But 1% success rate on anything but foes you can 1 hit KO.
Death in battle should be meaningless. In fact a character can die multiple times in a single combat against a boss!
You should have to fight a battle every few steps, but battles take less than a minute.
Battles against foes of an appropriate level should represent almost no threat, and only become so in aggregate. They are little more than a resource drain on healing items, making extended trips through the field require proper item hoarding.
Normal foes are no big deal, but special foes common. Some types that can only be targeted by certain weapons types, spells, etc. i.e. flying foes that can’t be hit with a sword, but can with a pole arm or gun.
The terrifying ones are ones with special effects. Like Marlboros which induce a bunch of crazy status effects. Poison which persists after battle. Bombs that do AOE damage when killed. Insta kill spells with arcane rules (for example your level is a multiple of 5).
Confusion status effects which make you roll a die to determine target, including self. That’s a thing you need.
You have access to all spells at all times, but use a mana pool.
Which a major usage of is some kind of summons. Uber powerful spells that you ‘collect’ from boss battles.
The scary boss enemy who joins your party. On their own they can wipe you out, but once they join you are curiously under leveled.
The power curve should be steep. Weapons should increase power by at least 50% per step, at least for the first few, but never less than 15% per step.
At the start you should be squeaking by rats, the end eclipsing the lunar deities.