Like you said, I think the combat was probably the weakest part of the Forgotten City. Exploring the overworld and navigating all the dialogue trees with new information could have carried the game by itself, though to my knowledge you do unfortunately need to engage with combat if you want the "canon" ending. Still, the ending made it all worthwhile and really pulled everything together for that final bit of catharsis.

By the way, if you're looking for something similar along these lines that really focuses on the information gathering, I've heard pretty good things about Elsinore. I've only played about an hour of it so far, but the opening seems really promising.

Mega man battle network 2! Though paper Mario ttyd would've been my first with a traditional battle system