-> as a side note, as much as I "LIKE" AOE spells doing damage*#of enemies, its just really hard to balance magic vs melee. It was easy(er) to do in FFH2 I think because the game was so abstract that you couldn't do 'real' magic, and-> then there was the pillar of fire ...
Currently a big issue with the mass damaging spells is that they inflict almost as much damage as a singular targeting spell, except they do this to each unit in the stack. Considering that a level 1 unit starts with ~6 hp, and fireball does base 6hp damage, even an unleveled mage has a good chance of wiping out an entire army. Granted units gain a massive ammount of health on level up, but leveling units is a very time consuming endeavor, and once defeated do not return. The same cannot be said for an allied (or enemy) spellcaster.
So there are a number of things that need to take place to make Area damaging spells less powerful than they are currently. The first and easiest change would simply be to prevent them from multiplying their damage per unit in the stack. Alternatively units could start with a higher base hp and have the ability to passively level, thus making a loss of a 'high level' unit less devastating.
Spells/abilities that have their effects multiplied by the number of units could also have that multiplication in the form of a decimal place. So for each unit present you gain an extra 20% damage (or something of that nature). As it stands the ammount of damage they can inflict is well past what any reasonable army is capable of matching in hitpoints.
There is a second qualm I have with these spells though that is unrelated to their damage, and that is the targeting mechanic. Given that you cannot cast the spell where it can strike your own units, the idea of a super-fast caster is almost required to have these spells function effectively. There should be some leeway in where these spells can be placed, even if it requires a trait on level up to say 'ignore x spaces' per area spell cast.