The mermaid queen is very much beatable, but requires a bit of RNG and hope she doesn't spam flood moves or ex heals. You also need to have a strong enough party setup with equips. I had a very very powerful and beefed up Kodachi with her ruler's sword(her ultimate weapon) and medina gave her doping and inoculate for mdef. I had also unlocked kodachi's powered up triple attack and limit break, used critical boost and all out assault,and easily was doing 800+ damage every turn.
Kodachi unlocks her triple attack and limit break if you pick her first option from her waterfall training scene. To unlock the waterfall scene, you need to lose a battle once.
I had a bit of trouble trying to find out how to unlock Aegis's(shield girl) scenes, but turns out the unlock requirements was to first peek when she's bathing in the hot springs at night, cause she actually mentions something about monsters(or in this case, the monster girls like flora) and if she should report it or not. You should then get a event right outside the inn the next day and you fight this hero. Beat him and then go talk to her at night and you should be able to bang her and unlock her scenes.
Edit: the best weapon for kodachi is found after you beat the possessed wyrmblade monstergirl, located in the ruins in wind valley, where you were stranded with Amy(You need to have progressed far enough in the main story). Best weapon for your main character and Amy is located in the foxgirl's shrine, you need to go to sleep and have the fox priestess drain your levels and exp about 3-4 times. She should give you the ultimate weapons for your main character and amy once you talk to her at night time the next time.