That's not entirely true. Fusing a pair of Offerings nets you one Offering of a higher level with more casts, however fusing a pair of Offerings of the highest level («««) nets you one offering of a higher tier which does cause more damage. Essentially there are three tiers - bronze, silver and gold Offerings, each with three levels. Higher tier equals more Damage, higher level equals more casts.
For example, two Pinwheels (S) («) will fuse into one Pinwheel (S) (««), however two Pinwheels (S) («««) will fuse into one Pinwheel (M) («). Fusing basic Offerings like this is a very easy way of getting high-tier Offerings early in the game.
Ooh, that makes sense now, I'm still somewhat early in the game (I did the Sorataria quests but I'm doing Avalon Pacts now) so I haven't been able to fuse up that much. Thanks.