From what i've understood:
-2* knights and less are only to be used if their skills match with your 3*+ knights. Otherwise sell them (keep one if you wish for collection purposes)
-Manyu are there to level you, feed them to the same colour
-Feed 3*s to themselves to increase skill level and equipment limit, they are not really too rare anyways.

I heard it's viable to level your 3*+ girls up to level 10 using 2* fodders before feeding manyus (fairies)

I find that I run out of inventory space before gathering enough of a single colour to do a full upgrade. It costs a hella lot of gold too, so not doing a full 10x merge at higher levels doesn't really seem viable.

Originally Posted by MiqDoloran

I find that I run out of inventory space before gathering enough of a single colour to do a full upgrade. It costs a hella lot of gold too, so not doing a full 10x merge at higher levels doesn't really seem viable.

you can use flower gems to expand slot. someone on another discord channel recommended expanding up till 100 slots to me.