I finally beat Auleria the other night. Just in time to sell it!
It was a very unpleasant surprise getting to the final boss and being completely unable to harm him based on too-low stats. It turns out I needed a sword (called BLACK'S) from this tree dungeon, which gave me a high enough attack stat to hurt the final boss. The one exception to this is a sword found in the final, uh, "dungeon" (which is just a set of empty staircases with the occasional NPC), with a sword (called WHITE'S) which was very weak, but ignored invincibility frames or something so did huge damage to the second form of the final boss.
Both Xak and Auleria do this thing which if you are too low a level, you cannot hurt the boss. This is really lame, in my opinion, as I feel it balances the game towards the "unfair" part of the spectrum.
Since I don't know Japanese I didn't give a shit about the story cinematics, lol. I guess they found their long-lost brother or something. Or something.