(Just my opinion)
People you should probably focus on.
Eliwood (not mandatory to raise your lords unless if you want to skip Lloyd's chapter though I recommend raising Hector)
Hector
Lyn
Sain (I prefer Sain over Kent)
Priscilla
Serra (if can bear her 5 movement)
Raven
Canas (he's alright)
Pent
Heath and Fiora (if you like flyers)
Florina (if you don't mind giving her some kills)
Oswin
Dart (I recommend using him on Hector's mode because of a free Ocean Seal on the desert level)
Rebecca (if you don't mind feeding her kills)
Lucius (he has great resistance and great magic)
People that you should use depending on your strategy.
Lowen (he's average though he has great HP and Defense if you want a mobile tank)
Marcus (he's pretty good throughout the whole game, use him for weakening people)
Isadora (she can be used for weakening people despite her low con she has alright speed.)
Louise (if you want another archer in your part she's decent)
Rath (if playing for ranks you can level him to boost EXP rank he's also good)
Matthew and Legault (they should be assigned to do thieves stuff nothing else)
Harken or Karel (both are good though Harken is better due to having a brave weapon and axes)
So.. yeah pretty much what everyone said that most people are usable in this game and also almost all characters in this game are usable so don't worry too much about selection.
Other things I could think of that might help you.
Marcus is a great unit just don't over use him.
This game is quite easy
Sidequest are not mandatory unless if you want Canas or more exp.
Not sure if you started but you are forced to do Lyn's mode first (tutorial) then Eliwood then Hector's mode (which is most enjoyable for me)
Eliwood's mode has lower limit of people you can deploy than Hector's mode
Hector's mode has different cutscenes
and yeah use this page http://serenesforest.net/fe7/gaiden.htm