What are the [party] mechanics behind Tera?
You can read a quick synopsis on the official site by reading the game guide entry for groups. However, to offer a complete answer, I'll address each of your points below.
Does being in a party net more experience than being solo?
If you're asking if mobs are worth more experience, then the answer is 'yes'. Being in a party nets the group 20% more experience after the original XP is split.
For a mob that is worth 100 XP:
- 1 person will get 100 XP.
- 2 people will get 70 XP apiece.
- 3 people will get 53.33 XP apiece.
- 4 people will get 45 XP apiece.
- 5 people will get 40 XP apiece.
[Does the party receive] more or less [loot] drops?
The drops are the same. However, you get better quest rewards from quests that typically require a group than you would from quests designed to be soloable.
Does the exp rate per individual change with the size of the party?
Yes. It will vary depending on both the number of people in the party and the levels of people in the party. If you are all the same level, you will all get the same amount of experience. Higher-level people will get a larger share of the experience.
Is there an optimum sized party for the optimal amount of experience?
What you really want to figure out is the experience you can gain per hour when you are solo vs. when you are in various groups with various people. Even though it's true that a mob is worth more experience if you group up, your character will get less experience than you would have if you had killed it by yourself. However, it will also die faster since it's taking damage more quickly. The idea is to see whether your play style means you earn more experience per hour faster by yourself or with others helping you.
All things being equal, you should end up leveling faster in a group.
Additional note: Quests are still worth the same amount of experience regardless of whether or not you are in a party. More people in your party usually means you can complete more quests per hour. This will boost your XP per hour substantially.