What a great core idea. I love the idea of a Pokemon-esque game where you fuse monster to fight other monsters, and it's an idea that could be taken much further. I'd love to see, for example, a stream monster having specific steam powers that affect water but not fire. Like, break out of the short/medium/long attacks, and theme them to the monster. But this is work for the post-jam version if you're going that way.
I loved the little monster drawings and how they merged together. I also loved the framing of the story, creating monsters to take over the world. I think you can learn into that more (maybe monsters in vats before merging, maybe fighting "heroes" with your monsters, etc) but loved what was there.
There is a minor issue where you can win a fight and keep attacking (and getting attacked) but it was a fun experience and a great proof of concept for something that could be great!