We investigate properties of a spin-1 Heisenberg model with extended and biquadratic interactions, which captures crucial aspects of the low energy physics in FeSe. While we show that the model exhibits a rich phase diagram with four different magnetic ordering tendencies, we identify a parameter regime with strong competition between N`eel, staggered dimer, and stripe-like magnetic fluctuations, accounting for the physical properties of FeSe. Through the comparison of numerically evaluated spin and Raman response with experiments, we find evidence for enhanced magnetic frustration between N`eel and co-linear stripe ordering tendencies, which increases with increasing temperature. The explanation of these spectral behaviors with this frustrated spin model supports the idea of local spin interactions in FeSe.
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