Fusion is useful if you want to modify your monsters. Just be aware that you will lose one in the process.
Fusion can also don new spells and traits onto your monsters.
The monster with the highest level will always absorb the lower leveled one. The only exception is the Leva fruit, which prevents any monster that eats it from changing form after it's next fusion.
The resulting genus is just like the rule for attacking; fire beats wind, water beats fire, and wind beats water.