Previous installments
Upon returning to Burg, Ramus tries to sell the Dragon Diamond to a local merchant, only to be told that he'd need to take it to Meribia to find someone with sufficient coffers to purchase it. But traveling to Meribia would require crossing the bridge to the port town of Saith, something that's not possible with the bridge still out. And this is where an extended series of fetch quests leading you to Meribia begins.
Near the bridge, you'll come across a cabin where a woodsman and his wife live. The woodsman has lost his axe in the Weird Woods, so you need to go there to retrieve it. The Weird Woods is a small, straightforward area with a cabin containing the axe at the end, so there isn't much to it. But it's also where you first meet "Liake," a mysterious but kind older man. This guy looks kinda familiar, huh? foreshadowing intensifies
After you return the axe to the woodsman, he tells you that repairing the bridge will take a bit of time, so you return to Burg for more exposition dumping. While Ramus leaves to say goodbye to his family, Alex does the same, receiving a letter from his father that he says will help the party secure a boat in Saith. After reuniting with Ramus at the edge of town, the party regroups and is on their way.
Saith isn't too far from Burg. It's not a particularly large or exciting town, but impressively, it has its own unique tileset. Lunar goes to great lengths to flex its CD muscle in more ways than just anime cutscenes, music, and voice acting. Many towns and dungeons have their own tilesets, and the level of detail in unparalleled for a 16-bit RPG of the era. Enemies on battle screens are animated, and the battle backgrounds are quite varied. The limited color palette even seems to work in the game's favor; lending it a kind of sepia-tinged air of melancholic nostalgia.
The fetch quests continue in Saith. When you give your father's letter to a man behind the counter of a tavern by the dock, his face lights up: He reveals that he went on an adventure in his youth with your father and Dragonmaster Dyne, but your father and him stayed behind while Dyne went on to glory. Something that's pretty fascinating about Lunar is that the events preceding the plot of the game are fairly recent. We aren't talking about centuries-old lore or mythological tales here; this is shit your dad was doing with his teenage buddies. No one doubts the existence of the dragons; it's just been a few decades since they've revealed themselves to humans.
Anyway, two more important things happen in the tavern. You learn that the ship cannot set sail because, through a bizarre chain of events involving a poker game and a thief, the sea chart is now in the hands of an "old hag" (the game's term, not mine, and trust me, Working Designs milks it for every last drop). Add another fetch quest to the pile. You also meet your next party member, a cocky young magician named Nash. The party (Alex, Luna, Ramus, and Nash, if you haven't been keeping track) heads off to retrieve the sea chart from the hag, exchanging Nash's water cane for it.
Finally! You can get on board the ship to Meribia and continue on your journey, right? Bah gawd, that's fetch quest's music! Your final task is to go to the top of the lighthouse near Saith and light the beacon so the ship can find its way. This is barely a dungeon; you just go up a few tiny floors to the top.
So this is a weirdly paced little bit of the game. It's setting up a lot of things that will pay off down the line, but so much of this feels like unnecessary padding. The combination of retrieving the sea chart and lighting the beacon feels particularly egregious and unnecessary.
It's right before your board the ship to Meribia that one of the key moments of the game happens: In a tearful goodbye, Luna decides to stay behind to keep Alex's parents company. You won't see her again until much later in the quest, and she really only shows up briefly until the end, despite being a key figure in the game. That's true in the Sega CD version at least; the remake for Saturn and PS1 has her come along for the trip and stay in the party much longer.
The change made in the remake feels like a very weird form of fan service, giving players more time with a character who's otherwise largely a cipher: She's Alex's idealized love interest, a pure-hearted girl on the cusp of womanhood who enchants all who see her. Other than some weird misogynistic shit that was presumably added by Working Designs where she gets jealous whenever Alex talks to another woman, there isn't much to her personality. Having her stay with the party longer just makes her shortcomings as a character that much clearer, especially in contrast with the rest of the main cast.
When I look at Lunar fans' preferences online, opinions are mixed, but it does seem that more people prefer the PS1 version. This is understandable: It's on a more advanced and much more popular platform, and it's technically a lot more polished and refined. I'm sure the PS1 version sold way more copies and was most folks' introduction to the Lunar series. But the older, wiser, and probably more attractive folks who played the Sega CD version first tend to prefer it, often specifically because it has the restraint to separate you from Luna before her character reveals itself to be paper-thin.
Regardless, in this version of the game, we set sail to Meribia with a party of Alex, Ramus, and Nash. Caldor Island is just a prologue. This is where the real game begins.