@Cyzeed
It's not even clear whether the NPCs are fluctlight-like AIs that have standard JRPG's common sense, or some of the "NPC" characters (like the fairy queen) are real humans that also dive into the game and personate themselves as the NPC.w
@siscon actually they made clear that NPCs like the Fairy Queen are honest to good AIs. Actually from the comments and how they act all NPCs are.
It seems the game is intended to be a world for their AI children which was mentioned a few chapters earlier. They tend to have earth meet with certain special ones since it seems he has a positive effect on their growth.