You need the Iron Key initially to get to the second town, but once you're at level 7 or 8, the best way to build up is to return to the room where you got the key. Drop the key and step on the fight square. You will face guards and mages that will be very easy. When asked if you want to pick up the key, say no. Then retreat and return. The square only detects if you have the key or not, so you can keep working this fight until you've leveled up. It gives much better gold than most tower fights and good experience, and it's very low risk.
At the main menu, create your save file by selecting the first option. You'll be asked to name it. Afterwards, you'll have 4 options, the first 3 are to create additional characters and the last one is to exit. Create your characters if you wish and then select exit. You'll be back at the main menu again. Now select the 3rd option and you'll be taken to another menu where you'll find the save file you just created. On this screen, hold Left and press Start. Release Left and press Up, Down, A, Select, Left, Start, B, Up & Down. The game will start automatically after the last button press. Now check your status and you'll see that all of your characters have 65,535 experience points!
While playing, press Select to turn off the music.