Having played a bit more now, it does seem to get better. Once you have some decent equipment and enough money to put a decent party together, combat feels a lot less random. Also, the doom squad that raped me was apparently just a story event. I had the option of simply not taking jobs in that area until it passed by and the encounters stopped being complete horseshit.
Item drops do seem to be extremely random though. I've found some very expensive and powerful items from the earliest parts of the game (including a one use item that basically overkilled the entire enemy party) and after even a little more progression, I'm finding much better stuff. The loot is mostly handled through trapped boxes, and there's a few ways to go about handling them, but the cheesy ways tend to make them extremely profitable- far more so than the missions themselves.
Opened this one up and got two items, one undientified. Items can also be cursed or broken, and seem to have some hidden attributes. Either that or the 'unlucky' shoes were wildly underpriced just to screw with my head.
After progressing even a little bit my options for what I can recruit, buy, and learn have all expanded significantly. Skills unlock both from gaining ranks and in a skill tree sort of fashion- although what or when you'll unlock stuff isn't stated, I've unlocked two different new sword skills by raising their predecessors to level 5 (out of 20). There is a LOT of room for combat skills, too, and there are passives as well.
Also, regarding the minions, they may not be as unbalanced as I first thought. I've discovered they can gain new skills as they level up, and their stat gains aren't linear either. So maybe the shitty slime monsters really DO serve some sort of purpose...