The battle system is fun as you start to get the hang of it but explaining it makes it sound harder than it is.
Here's a little summary of the major points that might help some people who find the information in the manual a bit scattered. (I haven't unlocked overclock yet so that's ignored).
1)Auto attacks
*Attack automatically at a rate determined by your equipped weapon's coooldown (X button switches between your equipped melee and ranged weapon)
These:
-Do damage according to relevant (melee/range) total attack stat of character
-Build TP according to weapon stat
-Progress corresponding arts' secondary cooldown.
2)Arts
*Powerful techniques that do damage, grant buffs, inflict debuffs, raise effect auras etc.
These:
-Become disabled after use until the cooldown period has elapsed (pie filling animation)
-Can go into a secondary cooldown (green ring) which takes the art to a more powerful level upon completion. Progress it by auto-attacking with the weapon associated with the art. (Note that Melee arts can be associated with ranged weapons!)
-May also require and consume TP (if art graphic says 'TP') but arts can also have special effects which increase TP gain under various conditions.
3)TP
*Tension points
These
-Are generated by auto-attacks
-Are indicated by the green bar next to the character's HP bar
-Are consumed by some arts (usually 1000TP)
-Needed to revive fallen allies or for them to revive you before you're forced to respawn at a landmark (3000TP)
4)Soul voice
*Prompts from you or your allies
These:
-Are important as your main method of healing. An "answered" soul voice heals both participants. The character's "potential" stat affects the amount of healing.
-Are "answered" by using an art that matches the color of the soul voice prompt. The game will highlight such arts in your palette. The color represents the category of art (ranged, support etc.)
-May grant other effects in addition to healing. Check the soul voices menu for details.
-Have trigger conditions. For example, one may have a chance to occur after you deliver the finishing blow to an enemy. The likelihood of the soul voices happening, increases with party morale (the three bars that fill with yellow).
-Have customizable effects, in the case of your avatar only, who also has four soul voices for which you can also customize the trigger conditions. Other characters' soul voices are set.
In summary:
When your avatar calls out a soul voice you want your AI comrades to use a matching Art. Therefore you should assign them arts that complement your soul voices so they have a chance to respond in battle. OTOH, when your allies issue a soulvoice for an art of a particular color you'll need to have a matching art in your palette that is not in cooldown if you wish to respond. (Such arts will emit an appropriately colored glow in your art palette and you don't have forever to act!) Of course AI party members can call and answer each other too. In any case, success will grant the effects listed in the description of the soulvoice (Menu->Party->Soulvoices) along with healing.
Morale:
*How good your team is feeling
This:
-Is indicated by the three bars located just above the left side of the art palette. When your team's morale is at the highest level, all three bars will be yellow.
-Goes up when you succeed in soul challenges (the circle timing thingy). Successful soul challenges also heal your entire party and calls out a soul voice. A "perfect" soul challenge also causes TP to be earned. That TP gain increases with morale.
-Lets your party call out soul voices more frequently when it's high.
-May affect some arts' effects
Position:
*Your avatar's location relative to the targeted enemy
This:
-Is indicated by the text just above the right side of the art palette
-Gives a better chance of dodging enemy attacks and landing critical hits when you attack from behind
-Gives additional effects or damage boosts to certain arts. An art might be stronger from the front or inflict a debuff from the side (possibly only after secondary cooldown!). Check the art description.
Hopefully that overview helps anyone who's a bit unclear on how to decide what to do during the heat of battle. For example, you may not want to spam arts prematurely if you hope to answer certain soul voices. Elma, for example, may call out for a support art (green) when her HP is under 25% and responding will grant her Invincibility I and extra healing (IIRC). So if you notice her health is low you may want to wait to use your support art in anticipation of the soul voice. You don't have to target Elma with the art (even though she says "Heal me"). Just use an art in the right category and she'll get "soul healing" + any other effects granted by that soul voice. The art itself may actually buff the user only.
HTH. Experts, feel free to correct anything.
Footnote:
*Skills are passive abilities that work during battle as long as they're equipped to a Skill slot. If a skill description says it boosts your max HP by 20% or makes you more effective against beasts (Theroids), that's what it'll do.
*You can destroy enemy appendages and if those appendages are needed for a certain enemy technique, you'll disable the corresponding technique in battle. You may also get specific loot at the end of battle. A circular icon indicates the targeted part and its HP (via a green inner circle). You can only switch the targeted appendage, on an enemy with multiple potential targets, by walking around the enemy. You can also toggle "target lock" by pressing/clicking the R-stick. If you lock to an appendage, the outer part of the icon will turn red. When "target lock" is on, you can walk around the enemy without switching appendage.