You just need to switch your chat to the 'group' option. Just click on the button that says 'local' and a list should come up (general, local, party, group etc.) that you can choose from. As for creating a party, you need to click on the people you want to invite and send them a 'party' request. You'll see it on their info page when you click on their character.
If you want to turn off other chat messages (like local or general) to make things a bit easier to read, click on the > button near the bottom of your chat box and 'deselect' the chats you want turned off. They'll turn back on automatically once you exit Feral Heart, but otherwise you'll need to reselect them if you want to hear what's going on in general or local.
Hope this helps!
