Your spells seem to do very little of your damage, percentage wise.
I continued using dragons/archdemons and cleared out all the islands of regular armies. I would mix up between using a single stack of dragons, multiple stacks, or dragons + demons depending on whether my strategy was more kiting or more aggressive. Fear, geyster, death star, and ghost blade the dominant spells.
After that I went back and started taking out heroes (using a knowledge scroll for extra xp), and once I'd done that, I started knocking down bosses. Driller, Demenion, the frog were all easy with my dragon army (hellooo hitting the boss through its own summoned troop), but I could quickly tell that wouldn't work for Gremlion.
I wound up using royal gryphons, archmages, and paladins for Gremlion. With two archmages robes, the +crit belt, and +crit mind skill, my archmages had a 100% critical strike rate. I used their magic shield on the paladins (they have lesser resistance) and attacked the boss otherwise. I let the gryphons and paladins kill the gremlin towers, while the paladins would give extra turns to the archmages. I cast ghost blades and fire arrows on Gremlion, and resurrected troops when my spell power hit 90-100% on that troop. I used rage eater to keep my mana up, and on the very last round, had my paladins heal all three troops to their full stack.
Driller
Demenion
Gremlion