I am not really sure about that end of the project, myself, it's viv who keeps up with the disassembly stuff.
I just do beta testing and script consulting, so I'm kind of as in the dark about it as you are, heh.
If I was gonna do my own Phantasy Star II mod, I'd want to do something about two issues; the battle backgrounds and the lack of any dialogue from the side characters, but I don't think I would want to. Those are issues that the game devs themselves would have needed to fix, and I feel I would be venturing too far into fanfic mode, to write actual new dialogues.
But FF6-9 actually have a system for injecting dialogue based on which characters are in your party at the time, and to me, that doesn't seem so hard as long as you have a large enough text bank to fit all the text, and a system for setting flags for who is and is not in the party. Then it's just a matter of knowing when to point what lines of dialogue where.
But, like I said, I wouldn't want to do a project like that, because that's going way overboard in terms of attempting to read the authors' intent rather than simply edit the story. I'unno. I would feel like I was engaging in (as Tolkien put it) "purposed domination of the will of the author over the mind of the reader." (Tolkien was addressing the question of whether LotR was an allegory.)
... I'm sorry, I've forgotten where I was going with this.