Level (レベル) is how strong the character is the higher the level the stronger the character is. In the Bonus stage all five of your charcters level and stats are reduced slightly that`s where the large amount of the difficulty comes from on the bonus stage as the bosses up there are leveled up higher,normal enemies will usally have levels close to your charcters level but some enemies are very powerful from haveing a higher level and stats.
Leveling Up[]
The level up system is differnt in this game rather than leveling through experience points a level up is gotten at the end of every mission,so who get`s to defeat who should not be much of a problem as a level is gained at the end and all stats increase by a certain amount. Also even if one of your party members are defeated during the level they will still get a level up in the end.