1. A living party member needs to use a Resurrection powder or cast the Resurrection spell (if they can/have learnt it) on the dead party member.Rez powders are readily available from many merchants.
3. Party looks good. There really isn't "one good party" make-up, the only thing to aim for is a balance between raw-strength fighters and book-worm spellcasters, which profession and how many characters etc really is up to your personal gaming style and choice. Wiz8 is so well balanced, you're very UNLIKELY to come up with a team that can't survive ... with the right strategy.