I am fully aware of how difficult and time consuming it would be, but is it doable?
Basically finishing the entire game without hitting any enemies with any offensive action, just activating immolation and standing there 'till they die
I was thinking of having my party be composed of only my main pawn, with only Buffs, heals etc. That way the damage he'll deal will be mostly minimal.
Any thought on this crazy idea?
It depends on how specific you want to get here. Technically no, as you cannot start the game with Backfire (the weaker version of the spell), Immolation, or Flameshroud (the strongest version). This spell is exclusive the Magick Archer class, which you cannot switch to until you reach level 10 and have gotten to Gran Soren.
Like most challenge runs in most games, there is usually an exception made so the challenge doesn't start until you are able to gather anything necessary. If we accept this exception, then the challenge is completely plausible barring two possible roadblocks near the end of the game. The spell actually does blunt damage, not fire, though it does have a chance to cause burning, which will then do fire damage. This means you would have to worry about an enemy that is immune to physical damage, of which there are none in the main story.
The second issue would be an enemy that you cannot get into melee range of/can't grab. I can think of two specific cases that may be an issue. During the final boss fight, I cannot remember, or find quickly online, if the boss will land without being shot at once it starts flying around. If it does eventually land, the rest of the fight will be possible if you allow grabs/climbing. The other fight would be the two wights fight at the top of The Greatwall. As you have double jump, you should be able to at least keep hitting them with damage at the top of your jump, if you cannot grab onto them. If they fly above your jump height, then you may be out of luck.
Finally, keep in mind that you may have to accept your pawns doing some damage. You can take off all their offensive spells, but you'll be hard pressed to stop them from ever using their basic light/heavy attacks.
