Also, I've been wondering this for a while, but does leveling up increase more than HP and SP?
I remember finding that my characters hit more often (and maybe did more damage?) at higher levels. Enemies that would give me a lot of trouble would become much easier after gaining a few levels, even with no other meaningful change. Also, kmonster is correct about the extra attacks, and of course you're aware that you get access to better spells at higher levels which make a huge difference.
If you still want to power-level, you can take on the mythical beasts, then head to the southwest island for the reward, then head to Castle Dragadune basement to convert your gold into experience (gather it onto one character if you want to boost their level in particular; I did this with my Sorcerer to help get him higher spell levels more quickly). You can repeat that process as many times as you like. But that may not be faster or better than grinding near Algary.
Note that there are some optional places that are tougher than the end of the main story, if you want to test out your high-level party. Like the dragons in the southeast; there are probably others. I actually didn't end up defeating them all when I played. I think I finished the game with my party level in the 12-15 range or so.
Also note that there's a lot more opportunity to power-level in MM2, including many optional areas that are super tough and require a high-level party (unless you use some sneaky tricks). You can import your MM1 party, but they'll be leveled-down a bit and lose all their equipment.