All of Reimu's attacks are physical? Really? So far I've noticed that fantasy seal seems to own heavy armored foes just fine (such as the turtles on floor 2 or 3 or whatever they were in when that floor was the furthest I've gone. Hard to say with bosses because Fantasy seal isn't exactly a good spell to use on bosses >=P, plus I'm more concerned with saving sp for the defense boost or heal anyway.
Generally when you get a character, the stat that affects their spell damage (attack or magic) is often made apparent to you just by looking at whichever one the character has more of at level 1. For example I just got Iku, and she had like 30 attack and 60 magic. So pumping magic will be more beneficial. Aya has higher attack, etc.
Sometimes the character has a fairly even amount of both. In this case, I rekon the majority of their spells use both (such as for reimu). I'm not sure but I suspect that stacking magic over attack generally seems to be the better idea for these characters since I'd rekon that they probably have ONE spell that might be pure magic (these characters often have buffs or heals, I'm gambling that China's heal is based purely on magic for example, and not both magic and attack. And if I'm wrong.. well, 200+ 0 = 100+100 anyway, so no biggie).
As for the person just starting. It starts out slightly more difficult when you only have 5 party members. Because it's difficult to maintain sp between battles since you can't really switch too many people out. I find that as you get a large party, you can just use 1 person to OHKO most of the enemy groups alone (pretty much any of patchy's spells, royal flare if in doubt, Fantasy seal, asteroid belt, soul sculpture, etc) with their biggest multitarget nuke while the other people focus. Swap that person out for another with a big multi target nuke afterwards, and repeat.
By the time big multitarget nukes don't 1shot everything, you're at the point where your party size is maxxed out so you can afford to bench 2 people at a time. Just make sure you don't use up all your sp on your ideal boss-killing team before a boss >=P.