The first form is rather basic, primarily using it's swords to attack, with the occasional Degeneration spell. The second form primarily casts Magic at the party. The third form has the lowest LP amount at the cost of gaining devastating attacks, while the final form has the highest chance to combo it's attacks, making Chaos the game's hardest enemy.
Though the reason for Chaos being the final boss is never explained, based on what characters say to it, it seems to be an embodiment of the power of The Seven Wonders that offers its power to those who conquer the Wonders. Ruby's quote of "I don't need your kind of power! Take a hike, will ya?" proves this.
Henri's quote of "We can make a world on our own. We don't need YOUR help!" shows that Chaos's intentions may be a rebirth or modification of the Unlimited Saga universe. The final battle also takes place on the universe's two moons Lazulia and Rosalia. Considering that Chaos is present on these two moons, (And the fact that one of the Wonders is called Two Moons Temple) this could also indicate that Chaos was banished there for undiscovered reasons, the power of the Seven Wonders keeping him sealed there.
Backstory from the Game Guide
According to the guide, Chaos in reality was a material, an energy used by the Arcanians to perform experiments, ones which created the undead, dragons, several monsters and even humans. Its connection to The Seven Wonders is that they existed as facilities to experiment with the Chaos.
The Creator worried that the Chaos would consume the world, hence he destroyed their civilization and shocked by what he had done, left the world.