The game only does that when going back to older areas and only to a certain extend as there is a limit. I often found myself quicksaving before going into fights and pressing F5 (reset to title and reload) if enemy levels where too low to still give me EXP. Enemy levels fluctuate for about 10 levels in each area and it seems random what you get. Even if you have bound captives with you to bring into the fight for easy EXP and item drops, they can be level 38 in one fight and 45 in the next or vice versa.
The final fight is far from unbeatable, read my tips a few posts further down if you're struck. I found it quite easy to come up with a strategy here and took her down on my first try,
Okay, maybe I was just lucky, I'll replay it now. No, wasn't luck, I took her down again without any problems. Only Aden got tied up after being stunned near the end when the boss had only 2K HPs left, but three more magic attacks from the others (with MATK buffed once and MDEF debuffed twice) where enough to still take her down easily before she could pwn anyone else.