Those bars control how often they use physical attacks or magic. Based on that pic, you've got each character set exactly how you want them to be set.
Which boss? It's been a while, but I'll try to remember what I did (and I also saved screens, so I can compare what level I was at when I played through). All of the bosses except the last bastard have a pattern that can be exploited, and some of them even have a cheap trick that can be abused.