Concept: Abilities

Well, maybe the Dream World isn't the most complex idea...

Due to the % Story Spoiler %, every Party Member, excluding the main character, has some form of Amnesia. None of them remember their Abilities or attacks, yet they all seem to be at the same level. In Reality, you always take control of one of the Party Members, and only ever one at a time. However, there are a few unique things happening.
First, every Party Member gains the same amount of Experience and levels up at around the same time. The thing is, that's it. They level up.
Leveling up means a few things. Every few levels you might be able to choose an upgrade to stats or skills, and every level grants some predetermined stat boosts. That's great and all, but it means you can't just level up and win, because...
The second thing is the feeling of being watched.
While you control one Party Member, another will be able to watch you fight while the others idle about. Though everyone seems to interact with Reality all the time, or at least respond to conversations, it actually takes a decent bit more concentration to watch a fight if they want to get something out of it.
Spectating allows a Party Member to watch a Reality fight and learn from it, because the way you gain Abilities is by either creating them at the Aspect Amplifier, or by seeing a similar action be performed during battle. These are actually set triggers in the game, actually. It doesn't matter what level the Party Member is. If they have an "Unknown Ability" related to shooting a fireball, and they see another Party Member or an enemy shoot a fireball, they'll tell you about that discovery if they're spectating, or exclaim if they're in battle. (Oh, I remember now...)
Like I said, though, only one Party Member can Spectate at a time. This means you can run around with a new Party Member on your back and use all of your Abilities, fight new enemies, whatever, and they'll begin to remember their Abilities.
There's another neat little thing about Spectating. Spectating will increase the Affinity/Cooperation of Party Members. Yes, I know the Affinity thing is in the Xenoblade games, but that covers areas and NPCs as well. I'm going for purely Party Member Affinity, and the more they like each other, the better they'll fight when together, either in the Dream World or with the other Spectating their battles. Of course, there are still limitations.
In Reality, having a pair of Party Members that really like each other won't work in a very different way than two who don't even know each other. The only differences are their quotes in the sidebar (which I'll go over later), and a few stat changes. Certain quotes have a chance to grant minor stat boosts for a few seconds. That's about it.
In Dream World battles, however, and in very specific Reality situations, Party Members can perform "Duets", or attacks that involve both Party Members. These will combine certain effects and are generally rather powerful. However, they can only be performed when two Party Members really like each other, and even then, you have to find the Ability to do so...

-Josh