I have never actually finished this game to many restarts but this is my party right now

Ukala Mook Bard Bloodlust and spells will switch to rogue for endgame
Mookie Mook Gadgeteer Swor Sheild Omni gun
Sensei Wu Hobbit Samuria
Sauron Lizardman Fighter Dual wield sword / mace
Damien Fairy Bishop All four schools
Storm Fairy Ninja (cane of corpus)
Vi
RFS

Personally, I don't like the idea of switching away from Bard, as you still need to be a high level to effectively use high-end instruments at high power levels. Plus, instruments that target enemies need you to be a high level to get through enemy resistance. Also, you will lose access to bard exclusive equipment (like accessories that boost strength by 20). Class changes are usually a bad idea in this game anyway.

Do you actually have the cane of corpus yet?

I'd drop the faerie ninja entirely and replace it with a human rogue, and keep the bard a bard. I don't find the Cane of Corpus particularly useful in large parties. It's amazing in a smaller party, but FNs tend to be fairly lackluster until they get it. On the other hand, bards are great and rogues are amazing, so you'd definitely want both of those the whole game.

I don't enjoy 8-man parties much either because everyone levels so slowly and they all get in each others' way, but to each his own.

Another option is just go Alchemist to build the spell power until you have the stick... THEN go Ninja.

A third option is to put a completely different character in that slot (like a Fighter) until you get the cane, *then* replace her with a faerie ninja. The downside is that the character will start at level 1, but using Guardian Angel or getting quest XP will allow the character to survive long enough to gain enough levels.

You talk about acutal replacing, don't you? Kicking out the Fighter and recruiting a completely new level 1 character?
Is this any good? I mean sure, the new character will level rather fast, but it's quite a long time until you can beat the Don (around halfway through the game I would think).

I have done some research on how stuff works in this game.

Just so you know, critical hit and other skill like that are very much based upon level matching. If you have a smaller party where you outlevel the opponent you get a big bonus to the percentage of time that critical kill works. If you have a full party and the enemy have more levels than you, then almost all of the time critical hit will not work.

The number of characters in the party isn't the important thing here. With a full party that outlevels the opponents, criticals will work well. With a small party that's underleveled relative to the opponents, criticals will not. Remember that random encounters scale with your party's average levels.

Also, physical attack damage is not significantly affected by level; it is the one thing that works well when you are underleveled. Yes, I do mean actual replacing.

There is one other thing you can do to catch your new character up:
0. I recommend getting access to Resurrection, either as a spell or as a charged item (like the Amulet of Life), first; doing so will reduce the cost of this strategy. I also do not recommend attempting to do this on Iron Man mode. Also, get a few levels for your new character first so she doesn't die easily.
1. In Arnika, near the ship wreckage, there is fire that will damage your party. Use it to kill everyone except your new character. (You may need some potions and/or Heal Wounds spells to ensure your new character survives; also be careful of fire resistance (on other charactrs) interfering with this strategy.)
2. Fight battles in Arnika with your new character alone. If you win, she will get all the experience. The Cane of Corpus will make your new character effective offensively; Stealth will increase as you fight, which will help defensively.
3. Once her experience has caught up acceptably, revive the rest of your party. Revive somebody who can cast Resurrection or use the Amulet of Life first to reduce the cost of reviving the rest of your party.

This trick should work in Wizardry 6 and 7 as well, provided you find a way to kill off the rest of your party. In Wizardry 1-3 and 5 (and most Wizardry spinoffs), you can just not take the rest of the party into the dungeon. In Wizardry 4, you don't gain XP so this discussion is moot.