There is plenty of videos of the game out on youtube that would probably help you understand the mechanics better than typing them into this thread, but i will try a little anyway incase you can't or don't want to watch youtube videos.
As for being fun i honestly can not say since i have not played it, essentialy you assemble teams of heroes and going into randomised dungeons to fight monsters, collect loot and hopfully survive the encounter to do it all over again. If that sounds like fun to you then i guess it could be. Combat is turn based, party management is very important deciding what skills each character takes and what position in the party they fill can result in quiet alot of variation even with the same team of characters.
The mental wear and tear as you say is a stress bar that fills up above your characters. Walking around the dungeon slowly increases it, depending on how bright the light is and what you encounter while there effects the speed which stress accumulates. Combat with enemies also add's to the characters stress level, some attacks more stressful some more damaging to health, critical damage will often cause lots of stress and health damage. As your characters fight back, scoring critical hits of their own and defeating enemies can lower stress, it can also be lowered by camping in the larger dungeons and useing special character skills to soothe the party.
Assuming your party surives the dungeon, when you get back to town you can spend gold for each character to lower their stress by sending them into buildings such as a bar or church. Some characters may have a specific trait that prevents them from entering certain buildings, they also may gain greater benifits from a particular building so management of where to send your characters for maximum stress relief is important. While resting your characters are not useable for the next mission, so you must send another party out whilst waiting for the first to recover fully.
If you choose not to let your party recover then they will enter the next mission with all the stress from the last one. If a character has a full stress bar one of two outcomes may occur, they will either gain greater resolve and become a much better figher, auto buffing the party and lowering stress for everyone. The other outcome is them going somewhat crazy, refusing commands given to them and adding to the stress of the other party memembers. This can quickly get out of hand and will likely result in some if not all of the characters dieing.
As for the dialogue, it is largley driven by the actions in the game for example if one of your party members scores a critical hit it may say somthing like "a mighty blow strikes down their foes" i have seen some repitition but because this doesnt occur constantly with every action the effect is rather good.
I hope this helps abit but as i said, watching some videos will probably explain this better than i can.
