It's not really balance that's important; it's niche protection. If your character is supposed to be the party Face-man, and another character just happens to be better at it, it's not going to be as fun for the first player.
Not necessarily. It depends on the characters and their personalities. Two characters might be socially oriented, but one is a noble and the other is an agitator. While one might be technically more eloquent/better than the other, different settings will make them better or worse than the other player. A noble, even with a lower Fel, will (if the GM is running it properly) have better luck socializing in a formal party amongst other nobility than a commoner Agitator. Even if they aren't *better*, it's a roleplaying game so the noble might be able to use their background to gain other benefits/information that the commoner agitator will. So, having a "lower" ability does not preclude having fun or being useful to the group, or filling a niche. If the group is having problems with this sort of thing, then I would suggest part of the problem is that the players made two characters that were so similar they cannot be played differently, and one of them should probably go into another career that provides unique "niche" skills to the group. I don't believe this is the fault of the game. It's up to the players (and the GM to a limited extent) to make their PCs unique.
@YokuniCat
Swordmasters can do some damage, but everyone trained in combat is a great use in a fight. The majority of his bonuses come from the "Way" action cards. Why does the Wardancer need to do the most damage, though? That's like saying the Wardancer, or SM, is upset because they cannot soak as much damage as the Ironbreaker, or that the Ironbreaker is upset that they cannot do as much damage as the SM. The Wardancer is a lightly armed and armored fighter. Their dance cards (if she's using them) are not aimed at maximizing damage. Anyway, unless you as the GM have house ruled and restricted action cards based on traits, the Wardancer can theoretically do nearly as much damage as the SM. Assume they buy the same stats, and the same action cards. The difference between the two characters is really just the GSoH abilities. +[W] and the ability to choose between two criticals. If the Wardancer picks up a masterwork or magical weapon, that offsets the +[W], leaving the difference as the critical ability. See? honestly, I think the biggest difference between various combat PCs are going to be the action cards they have selected. Some cards and combos do more damage than others.
My real point is, though, that not everyone will necessarily be the best at something. Yes, it is good to have a character be "best" at something. With all the options available, from actions to skills to talents, etc, that the fault seems to me to lie with the player and not the game if they aren't feeling special enough, though. They have not "designed" their PC (either with advances or background/personality) to be as unique as other people have. Talk with them. Ask them what they want their PC to do "best", or what sets their PC apart/above the others. Talk about how to make the PC unique enough to feel different/useful. Regarding your combat example, I would suggest your Wardancer, if she wants to do more damage, should look at the action cards she has bought and is using, as that is most likely where the "problem" is. She should look for more combos and synergy between cards, perhaps even acquiring ones similar to what the Swordmaster is using. Personally, I think a Wood Elf Wardancer inherently has some advantages outdoors and with skills to make her unique in other ways, and she shouldn't feel upset that the SM does more damage. <shrug>