I usually did things according to what I knew I could and could not do.
That's actually super smart.
Soo... knowing that, I can tell you some things that come to mind, and then you can decide what you wanna make of them, right? Like, decide for yourself if it's good advice or not, and something you can/want to implement. Not claiming that all my advice is either good or easy to pull off...
First off, I'm not too far into the story, so what I say may be irrelevant since it's addressed later in the story, but anyway. Here goes:
Phoebe is really sweet, but I feel like she falls a bit too neatly into the "sweet healer girl" type. Ok, I come clean, she a bit boring.
Now we're told that to make characters interesting, we should give them a flaw, yeah? And what we usually end up doing then is we're too nice, we give 'em a flaw or a weakness that can be sort of brushed away. What I'd like to see more, instead, are really story-impacting weaknesses. In Phoebe's case, some ideas that don't sacrifice her sweetness:
1) She's a raging alcoholic. Like, she really can't go for a day without drinking, and gets into fights and all sorts of trouble because of that. For this reason, she was kicked out of the Arcaneum. Right now, she could use some money (to get booze), but she's also like every other alcoholic and wants to put up a respectable front, soo... she sees her childhood friend Garrett and lo! She pretends she's doing everything out of the kindness of her heart, and latches onto him, hoping to get some gold. She puts on a sweet demeanour, but at the same time, she really does enjoy helping people and wants to do kind deeds... She just can't help her addiction to wine.
2) She's really belligerent. Like, subconsciously, she's always looking to quarrel. She's sweet, yes, and wants to help people, genuinely, but at the end of the day, she somehow always ends up screaming red-faced at Garrett (who may be screaming right back). She was kicked out of the Arcaneum for stirring up all kinds of trouble and dragging a fellow student down the hall by her hair. (She claims she's not violent, of course, but hey, there has to be some basis for her ability to whack bad guys with her staff, right?) Now she's rationalised the expulsion, telling herself that a true healer wouldn't sit idly in the Arcaneum but would instead travel with the destitute, dispensing her aid. Maybe she thinks Garrett is one such destitute person.
3) She's horribly disfigured. Like, so much so that people are frightened of her. This may be too hard to pull off at this time, but hey, all of these examples are not just for this game, but for future reference too.
This one's maybe the most tragic of the flaws, since she'd really be good and kind and wants to help, but whenever she's like, "Hey kid, Imma heal your broken leg," the kid's like, "Waaa, get away, get away, mommyyyy!" And people at the Arcaneum would be circulating foul rumours about her, because people are like that, if you're ugly they think your soul's black as well. And that's the one Phoebe has to really battle, she gets a bad reputation just because her face looks monstrous.
Now, what about Garrett? I like the angle where he's hiding that he's with the Crimson Hands, you could amp that up so much more. (As a general rule with this kind of writing, it's better to aim to go overboard rather than risk being too timid.) Like, he's basically a rogue, so why not have him spin tall tales about who he is and what he's on about? When asked by Phoebe and Keiji as to what he's doing, now he's behaving like a schoolboy the teacher found smoking cigarettes. But hey, he's a confident agent of the Crimson Hands, is he not? Practiced in deception, is he not?
Soo... he could be like, "Hey Phoebe, it's been a long time, I'm working for one of the northern lords now, I'm his top courier. That story about me being in the Crimson Hands? That's hogwash! I got selected for my position over some entitled fop, and now the cur is spreading rumours about me in petty revenge!" Like, it'd be cool to see more shrewdness in Garrett. They probably didn't choose Garrett as an agent because he was awkward and surly, right?
He could pile lies on top of lies until the whole pile teeters and totters, and finally in a culminating scene, he has to come clean about who he really is.
Another thing with Garrett you could amp up: his meeting with Dravax. Like, right now it's a bit weird, he meets this creepy helmet guy and somehow he knows his name, he doesn't know why himself. You could really play with that angle, make it even weirder, dreamlike or nightmarish. I don't know what Garrett's full story is yet, of course, but whatever it is, you could play with this first meeting to make it more tantalising. Like, what if Garrett suddenly acts like possessed? What if he suddenly starts to spout nonsense? It's a bit like that already, so all you'd have to do is play it up.
For example: While they're talking at the pub, Dravax gets up and leaves. Without comment, Garrett follows him, disregarding Phoebe shouting after him. Then, in the alley, Dravax turns and looks at Garrett, who starts to talk weird... then Phoebe turns up, asking what on earth's wrong, and then Garrett snaps out of it. And then, in Garrett style, he concocts up some story about why he was behaving like that!
...and when they look, there's no "Dravax" anywhere. To play it up more, ONLY Garrett saw him! I'd also not drop his name yet, "The Man in the Helmet" might be more fitting until we learn more about who Dravax is?
Later example: When Dravax goes to the ruins, Garrett kind of lamely says that for whatever reason he has to go too. And then they all go there, just because. But what if, once Garrett has brought Keiji in contact with Barth, he bids them all a hasty adieu and - again without explanation - rushes after Dravax? Don't know how easy this is to event, but then you'd have Garrett go solo for a little while, but then, at the ruins, Phoebe again catches up with him... and Keiji and Barth are in tow, because Phoebe hired Barth as her bodyguard (though Barth's more interested in sneaking into the ruins at this pretext, and/or violating Phoebe), and Keiji hangs on because he wants to make sure the captain of his ship doesn't get himself killed, thus forsaking his chance of getting back to Arondight (and maybe because Keiji has a bad feeling about letting Phoebe run around alone with Barth and/or Garrett).
So, um, yeah. That's as far as I got so far! Don't know if you can use any of these ideas in your current game, but they're also something that can be applied more generally. Even in a Final Fantasy style game, people don't just act because the plot compels them - they've got their reasons, and people's reasons are weird, dirty, funny, strange, heroic, and cruel, all at once.