Yep it's basically the concept of Dissidia, re-imagined as a rhythm RPG.

Official Japanese site:
THEATRHYTHM FINAL FANTASY | SQUARE ENIX

Sadly no, it's not made by Jupiter and doesn't seem to be anything like World Ends With You. If anything, it's more Elite Beat Agents

Andriasang has some good write-ups about the game

Form a Party of Four in Theatrhythm Final Fantasy
Over 50 Songs in Theatrhythm Final Fantasy