does the positioning of the pets in the party affect anything in battle? does the arrangement of your pets matter in terms of who gets attacked/healed first etc?

The pet in the first party slot (middle in a battle) will get attacked the most. Many people use a "tank" element in that slot, generally earth or shadow, sometimes water, and very rarely light.

Otherwise... I think pets with high agility and quickness rating get to act earlier, be it healing or attacking or whatever.

thank you so much! if i may ask an unrelated question: how does the day/night cycle and weather system work?

I think it works based on where Krin lives? I believe he's somewhere in Kansas...

The clock is certainly on a 24 hour schedule based on his time zone. Weather? *shrug*

thank you!