Hey, sorry it took a few days to respond. The farthest I got on hard was stage 120. Admittedly life's been crazy and I haven't had a lot of free time as opposed to last year when the game came out during a window of being unemployed. So I haven't done as much experimenting with challenge mode as I would like, I've barely even touched Fire Emblem Engage (Not that it's been all bad, this is the most social I've been since the pandemic lol).
I ended up sticking with my Element Genesis Seraph. I have been focusing purely on attack and wiping enemies out before they have a chance to kill me and I don't use any defenders. I have a Gust Bracelet, Shackle Ring, and a custom accessory that boosts attack 37% while also having some dex and crit rate (my crit's around 45%). For skills, I have Ultimate Quigong (EG is physical for some reason), Cypher Edge, and Capable Hands. On normal I used Protector's Pride but I think Capable Hands might be better to have EG ready to go, I'm going back and forth on whether that's right. I'd consider ditching Cypher Edge if I could get a custom attack accessory with more crit on it. Gems are empowered combo (cancel bonus is an independent multiplier like in 2), swelling blessing (should boost the attack, defense, and recharge rate from Awakening), and analyze weakness.
My arts are the standard EG seraph setup: Quickshot + Flamelord, Summon Element + Inferno Dance, Cross Impact + Leveling Fire. LF might be worth replacing. Quickshot has an interesting quirk (glitch?) when used as the master art in a fusion: both hits generate Talent Gauge. Every other positional attack or using Quick Shot outside of a fusion or as the class art will only generate Talent Gauge on the first successful hit. I'm also pretty sure you can't die during a Talent Art's animation (only have HP reduced to 1) and EG has a loooong animation. Also, make sure to launch before using EG against bosses to get Seraph's innate launch damage bonus.
Smash builds don't seem as useful as I initially thought. The HP of bosses on hard is multiple times that of the damage cap from a smash. I don't use any smash arts now.
For heroes, I always go for Melia, Nia, Miyabi, Masha, Fiona, and Alexandra. Fiona's obviously the only way to get four rounds of a chain attack, Miyabi helps keep your arts charged, Alexandria and Melia can break and topple, and Melia, Nia, and Masha give the party wide buffs. Masha's Arts Heal field has a party heal dissolution effect like the regen fields. I've equipped these six with fraternal badges for faster arts charge, just wish we could change gems for heroes too. I think it's worth waiting for these six, if none of them appear as freebies in the first two rounds, I restart. I play as Taion so always purchase the emblem that gives boosts with 4+ Agnian characters.
For emblems, I do think Moneybags is the way to go. I've fully upgraded it at the shop and had ~50,000 when I hit 120 on hard. I'm thinking it's worth it to go for the cap if possible. I also upgraded the price reduction emblem and purchase it either very early on if it shows up, or when it's a free option. I've incorporated some cursed emblems. I like the one that reduces boss health. I've also used the one that boosts attack per cursed emblem held but I'm thinking the HP penalty isn't worth it and I could just save points for moneybags. If I try another run this weekend, I'll probably avoid it and see how it goes. I think the one that boosts attack after a chain attack might be pretty good for bosses. I'm on the fence about the one that boosts attack when the nopwatch is low. I've actually not had any difficulty with the nopwatch running out. If nopwatch recovery is a whimsy option, I always go for it and that's usually enough, I barely ever spend points to refill it at the shop. I have been using the emblem that boosts whimsy chance at the cost of lowering events which seems nice for getting rid of moebius or enemy rush events that can screw you over. But yea, next time I try, I'm going to attempt getting the moneybags cap or at least as close as I can after fully upgrading the stat boost emblems.