Unfortunately in my casual playthrough I accidentally broke the combat system and by the end of the game nothing was a challenge; as with many other games there are "resistances" and "vulnerabilities" but also as with most non-Shin Megami Tensei games of the era, they aren't really strong enough or frequent enough to matter. I just pumped all my upgrades into Fire upgrades until eventually my routine end-game battle was one character to wipe all the enemies in one move, move to next battle. You could easily pump an elemental bonus enough to overwhelm the resistances the enemies had. More resistances and immunities distributed around would have helped prevent a degenerate strategy.
And of all the battle systems to have a degenerate strategy for, this one hurts the most because it is otherwise so good.
(Sadly, Grandia III was never completed. It was released... but it was never completed. The game as shipped has visible gaping holes in it, which is sad because what is there was quite good.)