For me the gameplay is not the main appeal of this game, it's the art, characters and the story.
The devs have implemented a way to "skip" all the combat by giving you the option to boost your stats to a godlike level just by reaching 0 shame, so you shouldn't feel like you're cheating or that you're too OP - it's intended.
If you want to have a challenging experience, my advice is to just hold out on upgrading your characters and outfits until you reach a satisfying ratio of challenge-rewards. After that you should only upgrade when it gets too tough to continue or the combat stops being fun.
If you want an RPG game with a fun and balanced combat system and great story and art to boot, try
Evenicle.
Another personal favorite of mine with challenging combat is the dungeon crawler
Lewdest Labyrinth.