Switcheroo! I am interested in the Final Fantasy NiGHTS.
Thanks for asking, of course!
In the case of FFVII, there’s not a lot of room if you want NiGHTS to stay as a physical being. In that real, there’s really humans, monsters, aaaand… that’s about it. There’s no other species of sentient beings. (Except maybe the Moogles, I suppose, but NiGHTS is no Moogle. And the only known Moogle comes from Zack’s Materia summon; Cait Sith’s hideous beast doesn’t count. And Nanaki is the only one left of his species.)
In being a dream character, though, not a lot would necessarily change. NiGHTS could keep the outfit, although it might get changed in for something a bit more subtle, or just darker colored. NiGHTS would probably have ended up spending a lot of time kicking around in Vincent Valentine’s dreams, since he spent some thirty-ish years asleep in a coffin. That might not go too well, as Vincet is a very serious and dour guy. on the other hand, Vincent does seem to get along well with Yuffie, who is more NiGHTS’s style; that pair would definitely get along well. And Yuffie probably had some nightmares about the war between Shinra and Wutai, which Wutai lost.
A piece of advice, though; NiGHTS should probably keep away from Sephiorth’s and Genesis’s dreams. And Jenova’s, for that matter. All three of them turned destructive, and definitely have the capacity to wreck NiGHTS and the Night Dimension. If any of the three knew that there was a realm of dreams, things would turn ugly fast.
As for other Final Fantasy games, there’s a lot to cover. Way too much. I can fairly safely say, though, that in FFXIII NiGHTS would most likely end up as a Fal’Cie - a status with high regard and responsibility, looked upon by the normal citizens as not too far from a minor god.