Fair enough, I usually start off RPGs at the highest difficulty since theoretically I can just change it downwards later if I need to, but I always get stubborn and try to tough it out even when it inevitably goes badly. :P For now, it's a challenge where I try to figure out the least gross compromises in order to progress quickly enough to not succumb. So far I've decided to show the alchemist my panties so that I can afford more mana crystals, so that I can begin learning magic. Those small spiders will go down a lot easier if I get fire.
Yeah, Charlotte dying round two is one of the lose conditions. Sometimes she gets taken out in round one (unless I get an ambush, which is very difficult to do because everything moves quickly and erratically), what's worse is Paul getting taken out, since he's the primary damage-dealer. And if John gets taken out, I'm basically screwed when the small spiders show up, since killing them off fast enough is quite difficult without the area attack. I did eventually pull it off, though (actually, I had already pulled it off by the time I wrote the OP, but I had to redo it because I found out that I wasn't supposed to bomb the gate to get to her).
It's weird that you can't reload during combat. When I played The Last Sovereign (a great RPGMaker classic), you could always hit F12 to instantly kick the game to the menu.