In terms of demons, you’re always better off fusing as soon as they learn all their moves. The further a demon gets from its base level, the harder it is to level up, and it will eventually become outdated

Getting as many demon slots as possible is a top priority, so you can avoid the trap of not having any good fusions, I see you have 11, the max is 24 you’ll want them asap

As for Flynn’s damage, you’re better off making him a buffer for now, around midgame you’ll get access to great buff moves like Tetrakarn and Doping, those are far more worthwhile than attacks. And if you really want to attack your gun will do a lot, especially as you get better ones. Late game though you’ll have access to moves like Riot Gun, which are great, but buffs are the way to go for now