Oh, Lunatic's hard, all right. You'd have to employ strategies you didn't think of using before.
It's a good challenge, though, and it feels pretty fullfilling you finish the mode on your first time.
Personally, I usually grind my characters even if it's unnecessary on the easier modes. I reclass at ten, and when I've gotten every skill I needed, that's when I promote them. It's fun doing it to the characters I don't usually use; it kinda feels awesome seeing those characters turn into badasses. c: