The rest must stay in the farm and rest. They get less than the active members of your party, but they get some. The sleeping monsters do not receive EXPs. You should rotate each gate with sleeping and not sleeping monsters. Monsters Level up just like the characters in the previous DW games.
Some spells level up in the game creating a more powerful effect then the previous one.
There are a few catches, they can only learn a certain amount of spells, so each time a monster develops a new spell they must forget one. It is up to you to decide which spells get cut. They also have a limit to the levels. The other catch is some monsters can level up quickly. You can find them in the stats next to their names.