Okay, This game is too good to be broken in this way. My party is as follows:

Oliver lv 36

Esther lv 35

Swaine lv 33

I've just gotten to the inevitable point in any JRPG when things just get way fucking harder for what seems like no reason. I'm used to it. The thing about Ni No Kuni is the world is huge and nonlinear in a lot of great ways. And one very bad way. My current objective is to get the three stones for Oliver's flashy new wand. The first two stones were laughable in their difficulty to obtain.

But now I'm on the third one, the one in the Glittering Grotto. When I started dying frequently I figured that last place the story brought me to (Autumnia) would be the best place to grind. But the creatures all run away from me and when I do get a chance to fight them they hardly do anything for me EXP wise. The creatures of Autumnia are two weak and the ones near and in the Glittering Grotto are ridiculously strong. There's got to be some middle ground but I don't know where.

TL;DR- Where can a mid 30 to low 40 lv party go to grind in this game?

In my opinion the best grinding spot is "Billy Goats Bluff" a mountain road which leads from "Perdida" (west of Hamlin behind a mountain range) to a dead end. But there you can encounter the rare mob "Tokotoko" which is not that hard to kill, besides that he will try to escape the fight usually very quickly, but if you manage to kill him, you'll get 8.000 XP for each one.

Can't remember at which level I started there, but I grinded there for hours to get my party and their main familiars to level 99. And later on a few hours more to evolve all my other familiars for the "Familiarologist" trophy (also a very good opportunity to getting rid of my podcast backlog...).

So it might be worth a try for you.

In my (admittedly somewhat limited) experience with JRPG's, when you hit this point it usually means you're doing something wrong. Are there any different tactics you can try? Something the guy you're trying to kill is weak to? Grinding for more than, say, half-an-hour should never be the answer...

Yeah, the method that @harlechquinn: mentioned is the best way to level up. Even just fighting one or two battles will level you up a ton there. If you've been following the Horace sidequest, after completing the Glittering Grotto you'll have access to a town where he gives you a new spell that'll help on sneaking up on tokotoko mobs.

Other than that, what familiars are you using? The starter familars you get are actually quite weak in the grand scheme of things. If you can catch a Naja(Have a look in your compendium) he'll be very useful as a physical attacker. Purrloiner is a slightly weaker but also somewhat of a viable choice. Monolith works as a good physical wall too.

Thanks for the tips! As far as familiars go I haven't delved into that system too much yet. I've chosen different familiars for each character so that I have at least one each that is proficient in each type of attack (Ex: Mite for physical, Sprite for water etc.) I think I'll try @harlechquinn's tip and see if that helps me out.

I would grind the grotto. I had a hard time at the start of that as well, just kept at it until I ran out of MP, ran back to the stone and went at it again. You'll

quickly be having no trouble.