The village you landed in looks to be occupied by intelligent walrus-men. They don't seem particularly happy, as they complain that they're hungry, and that their town is becoming too warm. There are three buildings of interest here. Use the Inn to rest up and save your game. Watts has taken over the local blacksmith's shop, in case you need any weapons upgraded. And the shop offers great defensive equipment. If you didn't purchase Raccoon Caps, Silver Bands, and Golden Vests from the merchant in Kakkara Village, or you came straight here, be sure to stock up on three of each of them as soon as you can afford them.
When you exit out of town to the West, you'll be in a small wooded area with an exit to the South in the lower left corner. The only enemy that you'll encounter here are Howlers. They are strong, but not too difficult to fight. They may occassionally cast a Level 4 Slow Down, but other than that, they have no special tricks. This is an especially good place to grind and get your experience, weapon, and magic levels up. You should aim to be above Level 25, with all three of the Sprite's magic at level 3. If nothing else, the Girl's Undine magic should be level 3 as well. Also remember to rotate your weapons around to keep increasing their levels. Keep running through this section and back to Todo Village to rest at the Inn and continue until you reach a sufficient level of power.
When you're ready, take the lower left exit, and you'll find a clearing with a house. A reindeer with a bright red nose will be worried that the occupant of the home is missing. If you explore inside, you'll find a chest with a Spear's Orb.
Continue down to the next area. This section will resemble the one outside Todo Village. In addition to Howlers, there will be Pebblers along with a new enemy, a turtle with a spear known as a Shellblast. There are two exits from this area. One heading East leads to a Cannon Travel Center which can transport you back to Matango or Kakkara. The other, heading West, leads to the next section of the forest. This next section is very similar to the previous section, with an exit heading North. It also introduces a new enemy, a cloud known as LA Funk. As a cloud, it can't be hit with physical weapons, so you must use magic to damage them. They can freeze blasts of snow which can freeze you (turning you into a small snowman), and they can cast Acid Storm on you. Locate the North exit to proceed.
Boss: Boreal Face
You'll have to battle a plant that can submerge beneath the snow and appear somewhere else. It will pop up in one of four corners. It's only vulnerable to physical attack when its head is visible, but it is vulnerable to magic as long as some part of it is visible. Depending on the timing you might even hit it as it sinks under the snow. When you strike it with a weapon, it shrinks back down to appear somewhere else. It attacks two different ways. While the head is visible, it will spit chunks of ice at you. It also seeds the ground with pods that grow a vine of thorns which extends in your direction. These pods can be attacks separately, although they'll whither away on their own as well. Concentrate attack spells on it and focus your physical attacks on the head whenever you have the opportunity.
Success defeating the plant will earn you a Bow's Orb, and the path will open to the north. You'll arrive in what appears to be an unseasonably warm village. It turns out that this place is being used as a swanky resort for rich people who love the warmth in the middle of all the snow. In the middle of the town is a man guarding a stove. If you approach him, he'd gladly give you his shift guarding the stove. If you examine the stove, you'll hit it a bit and you'll hear something inside. Choose to open it, and Fire Elemental Salamando will pop out. In return for rescuing him, he'll teach you Fire magic.
As a result of freeing Salamando, the resort will turn back to a frozen village. The men behind the resort scheme will abandon the place, along with all the visitors and occupants. At this point, it's not required, but it is highly recommended that you return to Todo Village for a couple of reasons. You will have an opportunity to save the game between here and the next boss fight, but you will not get to stay at an inn and restore your health and, more importantly, your magic points. You can only do that at Todo. Additionally, Fire magic is very useful in the next section, so grinding just outside of Todo to increase both the Girl's and the Sprite's Salamando level to 3 is extremely helpful. Plus, you can visit Watts and upgrade your bow which, at level 4, causes confusion.
When you're ready, head North out of the now-frozen resort, to the next section of the Crystal Forest. In this next section, you'll face Howlers, Shellblasts, and LA Funks. Consider trying some of your new Fire magic on the LA Funks. There are two exits from this section, and they both lead north. The left exit leads to a small clearing where you'll find Neko. Neko will offer to save your game, or sell you items. He has all of the great defensive items that are sold at Todo Village, but for much higher costs. The right exit leads to another clearing that travels straight up to a palace.
Defeat the Shellblasts that guard the front entrance, then travel up through the gates. In the next room, you'll find a wall blocking the way up, along with three switches. The lower center switch appears to open the wall until you actually try to pass through it. The upper left switch does nothing. Fight your way past more Shellblasts to access the upper right switch, which will actually knock down the adjoining wall, allowing you to proceed to the staircase beyond. You'll climb up to a small room occupied by a set of Blue Drops. If you remember fighting Green Drops earlier, Blue Drops have the same ability to multiply whenever there are less of three of them on the screen at the same time. You can hang around and fight them until they are gone (which is great for experience points) or you can simply head up through the door ahead.
The next room is occupied by two Shellblasts and an LA Funk. That path forks here, leading to a door on the right, and a door on the left. The door to the right doesn't lead to the exit, but it does lead to a treasure that's easy to miss out on if you don't explore everywhere. Passing through it, you'll reach a room where you must step on a nearby switch to extend the path. This path leads to another door up top. This door leads to a small room with the ghost enemies known as Spectres, which like to cast Freeze. Like LA Funks, they can't be damaged by physical weapons, only magic. They are weak to a type of magic you don't even have yet. Save your magic points, and simply examine the treasure chest in the room to obtain the Glove's Orb. Then return all the way down to the original room with the two doors.
Now take the left door, and take on the Blue Drop (or Drops) guarding the switch on the left side. Once you activate it, return to the main path, and fight your way past a Shellblast to reach the door above. You'll arrive in a small room with three Spectres and two switches. The left switch does nothing, but the right one makes a door appear in the back. Step through it, and you'll arrive in another small room with another new enemy. The machinal floating Weepy Eye can be harmed with weapons, so clear it away before climbing the stairs behind it.
You'll arrive in what resembles a library. It contains Spectres, and another new enemy: animated tomes known as Mystic Books. This room is actually a small maze that you must navigate in order to reach the exit in the upper right corner. To do that, you must find the openings between the rows, and even slip past a set of bookshelves that appear to block off the rest of the hallway, but in fact do not. Along the bottom, you will notice two bookshelves that look like they touch the wall below, but you can actually slip beneath them to reach the doorway on the right-hand side. From there, travel up to reach the door at the top.
When you enter the next room, some bookshelves will slide together behind you, blocking your escape. You'll encounter a set of Mystic Books in here. These enemies like to defend themselves by casting Lucid Barrier, and they can absorb your health by casting Energy Absorb. Remove them, and examine the switches at the top of the room. No matter what you press, you'll trigger a trap door, and be forced to fall to the floor below.
Boss: Three Tonpoles
If you recall the battle you had to do to rescue Undine, you fought a small creature who eventually grew into a larger lizard. This is the same except that there are three of them. No matter how tempting it may seem to use magic against them, it is recommended that you don't, as there is a much more dangerous boss fight ahead. You should be able to eliminate all three of these enemies with just physical attacks. The Tonpoles turn into Biting Lizards when they take enough damage. The Biting Lizards will try to eat your characters, but they won't do any damage as long as they get hit soon enough by another character. The Biting Lizards can also cast Cure Water, extending the fight a little longer.
After you defeat all three, you will be returned to the library. A doorway beyond the switches will have opened up (as well as the bookshelves that blocked your escape below.) Head through, and fight your way past a Blue Drop to reach the top of the room. You'll need to use the whip twice to cross the gaps to the right side of the room, where you'll drop back down. Ignore the LA Funk and the Spectre that occupy the room, and head past another Blue Drop to reach the middle of the room where you'll find a teleport tile.
Standing on the tile will send you to a small room with three Weepy Eyes. Fight your way through them and open the door above. You'll reach a throne room, and you'll hear a voice command "Be gone!" At this point, you're giving the choice to obey or disobey. If you choose Yes, you'll be forced to retreat to the room below. If you choose No, the next boss battle will begin.
Boss: Frost Gigas
The Frost Gigas is an icy giant with a lot of Undine's attack magic at its disposal. After taking some damage, it has a tendency to break apart into ice crystals which float around the room before gathering together at some other location and recombining into the Frost Gigas. It likes to give itself an advantage by casting Frost Saber on your party, making your weapons less effective against it. With Frost in its name, it should come as no surprise that it is weak against Salamando's magic. Both the Girl and the Sprite are capable of attacking with Fire magic, so take advantage of that fact and have them both bombard the Frost Gigas with magic. If you took the time to get Salamando to level 3 for both characters, you should be able to destroy the Frost Gigas with only a few spells. Even if you haven't, casting Flame Saber is a good idea to counter the effect of Frost Saber to do more damage against the giant.
Upon defeating the Frost Gigas, you'll earn a Boomerang's Orb. You'll return to the throne room to find a man dressed in red standing there. The reindeer you spoke with outside the house will come running in to ask if the man, Santa Clause, is alright. It seems he turned into the Frost Gigas because kids didn't believe in him, due to the fading of mana. He looked for a mana seed to grow a giant Christmas tree, but the seed turned him into a monster. He will then give you the Fire Seed. You are then transported to the entrance of the Ice Palace.
Your next destination is to head back to Kakkara Desert (assuming you visited there first, otherwise you must now visit it for the first time). Before you visit the Cannon Travel Center below Santa Claus' house, you may wish to head back to Todo Village to rest and save the game, and upgrade your weapons. When you're ready, visit the Cannon Travel Center and blast off to Kakkara.