Reminds me of another game I played called Final Fantasy Legends. You had a party of 4 that you could populate with 3 types... I loved the third one. Monsters. You would feed your monsters the meat of enemies you slew, and they would completely transform. They could be like any monster in the game, but unless you had a guide (which I did not) you had no idea what they would turn into. They could turn into an Oni and be completely badass or they could turn into an Alabaster which was a weak ass bird and suck. So it was risky transforming them. I almost always had a team of four monsters because I just loved it..
The Final Fantasy Legend series (there are three of them) are actually part of the SaGa series, just renamed for marketing purposes. You may be interested in the Playstation 1's SaGa Frontier. One of the playable main characters is a Monster that uses that exact system and I think every main character gets at least one Monster...at least, I don't recall them being particularly rare party members.
Not what you're looking for, but I couldn't help bringing it up since you mentioned loving that mechanic. Pretty sure all 3 Legends games also let you build your own party including Monsters and I don't think the games are connected, so you may want to just try one of the sequels at some point.
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In this world which will someday fall to ruin...
...dreams and hopes don't matter at all.