Grandia III disgraced the series, it was the bastard child. Doesn't deserve the name. Grandia II, however, was awesome. One of the greatest JRPGs. Definitely in the Pantheon of great games, unlike most of its lacklustre competition, notably Final Fantasy. Bleh.
Oh, and yes, at the by the end of the game... both characters gain their own independent bodies
Here is the rundown on the two girls and the story overall. Elena was pretty much a whiny little shit all the way up until the after story. In the after story you find out that she's become wise and very sage like. It was pretty nice to see her finally have some development. Millenia however was just an awesome character the whole way through and was the only one deserving of good end with Ryudo. She also had one of the sadist death scenes I've ever seen in an RPG. Anyway, toward the end of the final boss battle, Elena discovers that she had the power to bring back Millenia the whole time and finally does so, hence they have their own bodies now.