Why would I put my characters in the back row during combat?

Being in the back row reduces damage from non-ranged attacks, outgoing and incoming. This means that most enemy attacks will do less damage, but most weapon attacks of your own will also do less damage. Mages and classes who have ranged attacks like bows can safely sit in the back row - they can dispense full damage while avoiding a good portion of incoming damage.

Note that this effect is irrelevant to whether or not you actually have a front row. Having all back row characters means that everyone will be taking reduced damage from melee attacks. You could combine this with your Red Mage note and give everyone armor and still sit in the back row, while also enjoying the benefits of strong armor.

The main reason this is suggested with Mini status is because all weapon attacks while tiny are pitifully weak, front or back. So in general, you want to be a mage when you are Mini, and the best place to sit if you're a Mage is generally in the back row.