Ys Seven crashing.

[vsub_]

By "save file" I mean the folder that start with ULUS10551000 in memstick\PSP\SAVEDATA(if you actually ever saved the game the normal way...not save states only)

Save states only is a bad thing and by looking at your settings...you are like asking ppsspp to crash(even tho it didn't crash here)
Try deleting your settings(it is possible your default settings to also contains all those settings so just for a test,rename the folder SAVEDATA to something else and start ppsspp and the game without configuring anything(except the controller maybe...you can either copy it from the renamed SAVEDATA folder or rather than renaming the SAVEDATA folder,you can delete(to the recycle bin so you can restore it later if you want)the ULUS10551_ppsspp.ini and ppsspp.ini))

Edit:And I also notest that you are using cheats and certain cheats can case such problems