Best of all, later in the game you can recruit a Dragon character class into your party. You are only able to customize your one main character. Don't try to have all the characters do everything well. You will fail miserably. Think specialization, and you'll do fine.
Many skills are available, everything from being competent in leather armor to body building.
In addition, each skill can be mastered on four different levels of expertise, with some characters being able to rise to a greater level than others can. The manual provides a ton of useful charts detailing all this information, and it's in your best interests to look over it before deciding what sort of party you'd like to build. Trying to balance party member skills to cover all the bases can begin to feel like a job. Plus, you'll need to ensure that your spell casters are learning enough spells, and gaining levels in that area. They will need the best armor and weapons you can find or buy.