If they just say you need to confront all 7, why would anyone assume you need to do more than fight/defeat each one once? I'm not saying that's the case, but it makes more sense than imagining you have to level them up to some arbitrary number.
Anyway, I finally tried the trick of using my Magician as my leader against Ladon, and Ladon just became a chump again, even at level 45. Only one of my spirits died during the battle, and that's because I was using Basilisk who has really low HP.
Well, I have fought and defeated all the spirits once (even Peluda) and haven't gotten any challenges from Bahamut. Plus, from the hint given, it seems like his appearance is tied to having all the dragons at a certain level of strength. Either way, considering the progress some people have made, we'll find out by the end of the weekend just what the qualifications are.