Is it me or nalili is shit in battles?
Nalili might not be the best combat unit, but she can turn out pretty damn great with the right build and allies in the lategame. She's not designed as a "first turn-hitter" like Robin or Aka who shine at taking out small groups of enemies before they can hit back. Nalili shines when dealing with foes that can't be taken in the first few turns and need to be worn down, which becomes increasingly common in late chapter 4 and chapter 5. (I guess Sierra became tired of hearing about Varia- sweeps)
She is by far the most logical user of the Tormented Shield that you get in chapter 4 since she's the only possible wielder who doesn't care about tanking her MAG stat or who has unique off-hand equipment. This takes her STR to obscene levels and allows her to keep her SPD to Aka-levels.
Pair her with another Succubus, preferably BP-Qum. Qum casts Arousing Aura on the first turn, while Nalili masturbuffs herself. At the end of the first turn she's got a double offensive stack and a fuckton of LP. From here on out you either try to go for Aegis, if your foes are weak to lust or just go full damage-dealing mode where you spam her best attacks, while Qum (and potentionally Simon) keep her LP up.
She doesn't hit quite as hard as Varia does with the same setup (Where Varia replaces masturbation with servants frenzy on the first turn). But she is far more durable, and she can convert all of her damage to lust-type in battles where that is relevant.
In battles where the foes hit hard enough to KO Varia consistently, Nalili makes for a solid replacement. There are also sections where the party splits, where you'll be elated to have her with you.