You have to literally attack the city of pia and win. If you have the vanguard vessel and have all 5 members of your party with claymores and mithryl armor is isnt that hard.
Nope you always have 100 health. But if your question is about healing then im not for sure, the only way i found was to buy something from a town. Im not for sure if it will always work but it normally did for me.
well. . . there's a HUGE[i] glitch/ cheat in the game. This kinda doesn't have to do with your question. When you hire or help some one that doesn't have any attack skills, and you don't add any weapons, each time you enter a battle and you attack, it says NaN- Which apperently kills your enemy.