Further thoughts:
Give monsters AI. Make them only heal as needed, and not re-cast offensive/debuff/negative status spells on characters they have no effect on. Obviously you'd need to rebalance their attacks, because there would be absolutely no reason for a Stray Cat ever to use its standard attack instead of Cat Scratch. (Which I guess is the same problem with Edgar, Sabin, Cyan, and the Fight command.) Maybe add charge time to the more powerful attacks? I'll get back to charge time in a minute.
Either give Gau, Mog, and Umaro AI much like what I described above, or make them controllable. Make your character controllable in the Coliseum, too.
Gau/Veldt:
Make Gau automatically learn rages from every monster he defeats, whether he's on the Veldt or not.
Veldt can still serve a purpose as the place where you can re-fight monsters from earlier in the game -- but needs a few tweaks.
First of all, get rid of the current arrangement of monsters (where you fight a random group from an ordered list). Split the Veldt up by region -- maybe arrange it so that it resembles the world map in miniature. Go to an area on the miniature map and you'll fight monsters from that part of the world map. (Obviously this would be a little trickier to implement in the WoR -- do you have a mix of WoB and WoR monsters in each region, or find some way to split it up into two miniature world maps?)
And no more missable Veldt monsters. If you've been to a region, monsters from that region will show up on the Veldt, whether you've encountered them or not. (The exceptions would be the two bosses, provided you even keep them as Veldt monsters; that was always kinda weird.)
Celes: While Terra and Strago make sense as pure mages from a plot perspective, Celes doesn't. She's been raised as a warrior from infancy; you'd have to expect she'd at least know how to handle a sword when MP runs out. I say make her an FF5-style Mage Knight; give her the ability to enchant weapons with elements or effects. You could keep Runic (as described above, in a more useful context where it only absorbs enemy magic), or you could drop it entirely in favor of Magic Sword.
Magic: The four natural mages (Terra, Celes, Strago, Relm) should have visibly better magical aptitude than everybody else. I think everybody else's magic stats (Magic, MP, M Evade, M Def) should be nerfed -- not to the point where magic is useless, but to the point where it's noticeably less effective than when the natural mages do it. (Gogo's actually a pretty good example of a character who can still use any ability in the game but is visibly worse at it than its natural practitioner.) I'm thinking you could also add charge times for the non-natural magic users to cast their spells.
And speaking of charge times, that's what you do with Cyan. Have him pick his attack from a menu and then initiate the counter; if you want to do, say, #7, it'll still take just as long to prepare, but everybody else in the party can keep doing their thing while he's preparing it.
Also, either eliminate his intermediate attacks or make them useful.
Similar goes for Edgar -- there's not really much reason to use any of his tools except Autocrossbow and Chainsaw.
I say nerf Chainsaw a bit. (Make the difference between it and Drill more striking -- make it useless against monsters with high def, for example, so that Drill is clearly a better choice there.) Make monsters more susceptible to Bioblaster and Noiseblaster (and maybe add some more tools that cause different status ailments) -- here's a thought, maybe even make monsters that would normally repel a Bio or Confuse spell susceptible to the Tool version.
Introduce Debilitator way earlier in the game -- say, before the Magitek Research Facility. (Technically it's possible to steal one from the crane boss, but it's rare and that still means you get it immediately after the part of the game where it would be most useful.)
