The Hero and Rab are basically Jack-of-All-Stats type characters who almost end up becoming Master of None while not quite getting there in practice - always outclassed by the specialists (Jade, Veronica, Serena) but still very reliable characters. However, it seems quite obvious as to why they both end up as this - they're related by blood. It runs in the family! Who's to say that if the Hero did train on Angri-La like Rab, he would know more magic.
Rab's lower physical capabilities are also easily explainable - he's old. Sure, he's healthier than a lot of older men would be, but he's still way past his prime.
It makes sense to why Erik lost to Jade in the Masked Martial Arts tournament. Erik relies on status effect setups, Damage Over Time prep spells and crowd control weapons for most of his damage, while Jade has unmatched burst damage on single targets. Of course she would clobber Erik easily when she can beat him down quickly before he can poison her or put her to sleep, and would lay him out far faster than his spells would wear her down.
Mordegon is revealed to have originally been the human Morcant during the Era of Heroes. Morcant happens to look almost identical to King Carnelian, who Mordegon had been possessing for most of the story. This may be a sign that King Carnelian was a descendent of Morcant, which may have played a role in Mordegon's ability to take over his body, or it could just be Toriyama's Only Six Faces coming out in full force. Speculation aside, since Mordegon would end up possessing the same body for over 15 years, it stands to reason that his host's appearance would be start to become influenced by his personal habits and tastes.
In Spite of a Nail, some of the monsters you fight in the "main game" are still present in the postgame despite taking place before Mordegon's rise to power, with Calasmos taking his place. Why is this? Because they were already there before the initial Wham Episode. They're stronger in the postgame because Calasmos is empowering them - not Mordegon.
When encountered in the main game, Tatsunaga has essentially gone insane and you're doing a Mercy Kill. However, in the postgame, Tatsunaga is still able to be calmed by Miko - of course. Because you're at least a few months in the past - before he lost his mind.
When one finally gains the Sword of Light, it's obvious to longstanding series fans that it's the Sword of Kings, aka Roto's legendary sword. That is very obviously the Sword of Kings; But it is later on upgraded even further to the Supreme Sword of Light, which... Changes the design. One might think this creates a plothole, how the final iteration in a Stealth Prequel would have a differing design from the one of Dragon Quest I-III, but then one remembers that the original Sword of Kings was broken by Zoma before Erdrick/Roto had a new one forged. Evidently, the succeeding sword was fashioned after the blade's penultimate state.
Adding to this, the Supreme Sword of Light is essentially a fusion of the regular Sword of Light and another powerful blade that also happens to be called the Sword of Kings. Its probable that the names of the two swords became synonymous or otherwise misappropriated as history descended into legend.
A few monsters you fight early in the game mention a dark master. Most players will assume it to be Mordegon... but only a few such Dora-in-Grey actually say who it is. It might actually be that they are referring to Calasmos.
The rematch with Mordegon in the postgame is much harder than the fight against him at the end of the story, despite now being in a much weaker form. The difference between them, however, is one of tactics: having originally been a human mage, it's only logical that he would be more talented and more experienced at fighting with magic and trickery, rather than the physically-oriented brute he became upon powering up.
There's also the fact that by the time he's fought in the postgame, all of his plans have been ruined and he's been backed into a corner. The fight is harder because he is fighting harder, pulling out all the stops as he desperately tries to salvage his situation.
An easily-missed bit of brilliance in the fight against Jasper Unbound - look at the bahlib, an enemy he'll summon for backup. Purple hair, wields an axe? He's essentially made a monster equivalent of Hendrik his subordinate!
It seems odd at first that the Sword of Light Eleven forges is so inferior statwise to the Superior Sword of Light that Erdwin forged... and then you get to the postgame, where Drustan gives you instructions on how to forge a better one. Erdwin had Drustan helping him from the start, and so had a more professionally made blade, while Eleven party had Hendrik, who only knew the basics of forging. He didn't do as well with the same materials as his crew simply did not have the knowledge to make a superior blade.
Serena's Important Haircut in Act 2 can look like just a simple case of letting go of one's old self. In the context of Arboria's customs however, it takes on another level of meaning. During Veronica's funeral, Serena asks the Arborians to offer up locks of hair to the flames so that their light can guide Veronica back to the World Tree. However, she herself isn't shown to offer up any. If you talk to a few NPCs in Arboria after the funeral, you learn that the custom comes from the idea that a person's memories are intertwined with their hair, and giving up that hair to the flames was like giving the departed a piece of yourself. More hair indicates more feelings so people closer to the departed usually offer more hair. Serena describes her life as having lived in Veronica's shadow, so giving up her hair at the funeral would've been like showing Veronica that she hadn't grown or matured at all. So instead, she cuts off most of her hair and lets it blow off and disintegrate into the wind. Veronica's spirit, contained in her staff, recognizes this act (Serena letting her old self go) and transfers all her powers to Serena, knowing now that the promise she gave to Serena, to continue in her stead if something happened to her, has been fulfilled.
From the beginning of the change in events that lead to the third act of the game, while everyone else seems placated, Rab is still onto Carnelian from the word go, continuously voicing his unabated concerns, and the reason why is because "Carnelian" made a fatal error. In his haste to cover his hide, he passed the buck to Jasper, claiming he was the one who spread the Darkspawn idea in the first place...except that would be impossible, because the notion of the Luminary being a harbinger of darkness was discussed privately among Erdrea's kings the night Dundrasil fell. Jasper couldn't have known it, Carnelian would know it— but Mordegon, who'd had no knowledge of these things, wouldn't realize he was basically telling an incredibly obvious lie to the one man left in the world who would know it right away and realize something was amiss.
As part of this game's status as a Stealth Prequel to Dragon Quest III, the entire party acts as a reference to the original job classes, to the point of being reconstructed, with some commentary on how players used them.
The Luminary, obviously, has the Hero class and even gets a modified version of the original costume.
Erik is of course the Thief.
Veronica is the Mage. The fact that she is the one absent for Act 2 reflects the fact that players typically preferred Clerics for the class change over mages.
Serena is a Cleric who upgrades to a Sage in Act 2 and even gets a modified version of the original costume in Act 3, reflecting the fact that Clerics were typically the player's first choice.
Sylvando is a Jester redesigned to actually be useful. Though he never changes class, his remarkable versatility reflects the fact that Jesters eventually became Sages on their own.
Jade is a standard martial artist, though her Sex Appeal skill tree and her bunny costume indicate that she may have spent some time as a Jester.
Rab is a Sage redesigned to be balanced with the other classes. His ability to use claws suggests that his starting class was Martial Artist. Despite physical classes as a whole being much less popular than Clerics and Mages for the class change, a Lightning Bruiser like a Martial Artist was better in the long term due to the Sage's stat growths.
Hendrik is a Warrior, and even gets a modified version of the original costume. His healing spells indicate that he spent some time as a Cleric, which is a common method for giving the Warrior some utility.
Gemma is a Merchant. Her sidequest of rebuilding Cobblestone is a reference to the sequence where a Merchant was required to build a new town. Gemma never joins the party because, outside of that one required sequence, very few players used the Merchant on its own merits.
It's a small thing, but the instrument Sylvando plays -a dolçaina- is more than just a way for him to entertain people and use certain abilities. Playing a dolçaina requires endurance and great breath control, both of which would be necessary for his fire-breathing skills.
At the start of Act 3, the Luminary's actions shatter both the sphere and the sword. However, at the end of Act 3, the Timekeeper... does not end up shattering the sphere and sword with what they do. This leads to an easily missed realization — the Timeline in Act 3 replaces the Timeline in Act 2, whereas the Timekeeper's actions create an alternate history (or a tragic Stable Time Loop, based on how optimistic you find their chances).
As noted above, Hendrik is a Warrior who spent time as a Cleric to give himself some utility skills. By the same token, Jasper is a Warrior who spent time as a Mage to diversify his offensive options. A reasonably common practice among players, but less popular than its counterpart because the Mage's spells still had to run off the Warrior's low Intelligence growth, while healing and status spells were unaffected by the user's stats in Dragon Quest III. The fact that Hendrik's route meshes better with his base class's stat growths while Jasper's depends entirely on his second class's growths is yet another layer of Jasper's Always Second Best complex.
Starting the Darkspawn rumor, meanwhile, is simply to prevent the entire world from ganging up on him for persecuting The Chosen One before he becomes too powerful for this to change anything; if they're convinced that King Carnelian is acting to protect the world, they'll stay out of things until it's too late for them to interfere.
On a related note, Rab and Jade likely found out about Mordegon's existence because he deliberately fed them that information to make it clear that it's not just the king being a dick, there is legitimately an ultimate evil involved.
His breakdown at the start of Act 3 is likely just him being bad at improvisation; give him time to plan and he can pull a massive worldwide Batman Gambit, but if something goes wrong he needs time to adjust or he'll ruin everything in a moment of impulsiveness.
King Carnelian was possessed for 16 years, and his dialog implies that his true self was aware but repressed the entire time.
The gist of Booga's subplot is that he turns people into monsters, and all the monsters you see around Octagonia used to be human. Did any of these humans-turned-monsters leave Octogonia? How many went after you? Same with the Vikings in Sniflheim. Gyldigga essentially sent them to their deaths once they realized the heroes were coming.
When escaping Heliodor's dungeons, Luminary, Erik, and a bunch of guards step on a stone bridge which collapses into the water below. The guards had to have drowned since their armor would weigh them down, making it difficult to swim. Same thing after fighting Japser in Gondolia. As everyone literally jumps ship onto Sylvando's Salty Stallion, a couple of guards fall into the water.
A side quest has a zombie girl run out of perfume and asks you to go to her dad for another shipment. Once you deliver it to her, her post quest dialogue says she's not to reveal the secret ingredient, especially to humans because "you might not like what you find out". What is in the perfume? Considering their zombies, it has to be squick-y at best.
When Sylv and Erik wake in their respective side stories, they're both seen in pain; the rest of the party may have gone through the same thing. This is all down to one of the spells Veronica used at the end of act one; Zing Stick. It absolutely guarantees a person be revived with a portion of their HP back - and when Yggdrasil fell, she had to do that for eight people at the same time, with her less-than stellar magical mending stat. No wonder poor Sylv passed-out shortly after coming-to.
At the very start of Sylv's side story, there's nothing but a black screen with white text, and Sylv's voice asking what happened, and wondering where he is. Given the abovementioned point, this disembodied voice could well be his spirit talking just before it found his body.
Vince drinking Arachtagon's erm...potions causes him some ill effects. Rab even mentions that its eating him from the inside out and he's lucky to be alive. Vince no longer drinking the potions doesn't undo the potions he drank earlier. They could very well have a delayed effect and eventually kill him sooner than expected.