Oh boy, this is something I've always wanted to talk about. Let's see here...
I don't actually have a specific plot in mind, but I'll detail some things I'd like to see. The story would primarily be focused on characters and content from Three Houses, Blazing Blade, and Shadows of Valentia, with some minor roles for the previous trio of games (Awakening, Fates, Shadow Dragon). It would take place in a different world from Aytolis, starring a new cast. The plot doesn't need to be too complex, and I would rather it be character-focused than anything else. Perhaps our heroes are chasing their world's Gharnef-archetype through various other worlds, collecting each world's heroes along the way.
From the previous game, a small handful of veteran characters appear during the main story; Marth, Chrom, Robin, Lucina, Corrin, Ryoma, and Xander in minor roles, with Lyn and Celica in more prominent roles. All other veteran characters only appear in (and are unlocked within) History Mode.
Before I get into characters, I wanna talk about this mechanic. It seems to me that two of the biggest gripes with the previous game, besides the chosen representative titles, was A) an overabundance of sword-wielding characters and B) a large number of shared movesets. With this, I hope to kill two birds with one stone.
Movesets are now "classes", and each character has two. Characters unlock their secondary class by using a Second Seal, just like how they promote with a Master Seal. Shared movesets are the same between characters, though Warrior Specials, Dual Specials, and Awakening Finishers are unique.
Some characters have a third class they get via DLC.
Previous Game's Classes
For the sake of clarity, here were the previous game's movesets, translated into my class system:
Sword Lord (Rowan, Lianna, Darios): An experienced swordfighter of noble birth.
Lodestar (Marth, Celica): A refined master of swordplay with a quick, elegant style that strikes with the tip of the blade.
Mercenary (Chrom, Lucina): A well-balanced, if somewhat crude, swordfighter with broad, heavy swings of their blade.
Myrmidon (Lyn, Navarre): A very swift swordfighter who prioritizes unseeable movements and lightning-fast slashes.
Samurai (Ryoma, Owain): A precise master of the sword who makes every swing count.
Nohr Prince(ss) (Corrin): A noble of mixed ancestry who combines powerful swordplay with draconic power. Exclusive to Corrin.
Dancer (Olivia): A graceful dancer armed with a sword. Can bolster the morale of nearby allies.
Sword Cavalier (Xander): A swordfighter who rides atop a horse. Able to move quickly and strike hard.
Soldier (Oboro): A master of the lance who balances long-reaching offense with solid defense.
Pegasus Knight (Cordelia, Hinoka, Caeda): A lance-wielder riding a flying horse. Fast and precise.
Songstress (Azura): A songstress who wields a lance as well as powerful music. Can bolster the morale of nearby allies. Exclusive to Azura.
War Cleric (Lissa): An axe fighter who mixes magical staves into their combat for both offense and support.
Great Knight (Frederick): An armored axe fighter atop a heavy steed. Powerful and durable, but slower than other cavalry.
Axe Wyvern (Camilla, Minerva): An axe fighter riding atop a mighty wyvern. Boasts incredible strength.
Archer (Takumi, Sakura, Anna, Niles): A balanced bow master who shoots down all in their path.
Mage (Robin, Tharja, Validar, Iago, Gharnef): A master of anima magic suited for breaking through sturdy defenses.
Light Mage (Linde): A holy mage with an emphasis on light magic and support.
Mage Knight (Leo, Elise): A mage on horseback who fights with potent black magic.
Young Manakete (Tiki): A young manakete armed with a dragonstone. Has a strange, childish fighting style but can transform.
These are the new classes (and thus, new movesets) that would be available. Which characters use which will be covered later, though some are obvious.
Vanguard: A frontline mercenary armed with a powerful, heavy sword. Exclusive to Ike.
Conqueror: A left-handed swordplay style mastered by one who will unite a continent. Exclusive to Alm.
Professor: A mercenary equipped with a special sword that can extend its reach near-infinitely. Exclusive to Byleth.
Lance Lord: A noble armed with a lance. Powerful and skilled.
Lance Cavalier: A lance fighter atop a steed. Strikes foes with a long reach.
Lance Armor: A heavy, armored class equipped with a lance. Slow, but boasts impregnable defenses.
Fighter: An axe fighter who crushes foes with wild, heavy swings.
Axe Armor: A heavy, armored class equipped with an axe. Takes heavy blows and retaliates in kind.
Axe Armor Lord: An armored axe fighter of noble birth who stands tall on the battlefield.
Outlaw: A swift thief armed with a bow who incorporates acrobatic skill into their style.
Priestess: A defensive archer who utilizes slower, more graceful movements, and mixes in magic staves.
Bow Knight: An archer on horseback who never misses their mark.
Bow Wyvern: An archer riding atop a wyvern who rains arrows down from above.
Dark Mage: A mage with an emphasis on sinister dark magic.
Tome Troubador: A mounted mage who uses both offensive and support magic and staves.
Thief: A quick, stealthy agent armed with a dagger, specialized for slipping past enemy lines.
Maid/Butler: A diligent servant who supports their liege with a sharp dagger and magic staves.
Brawler: An up-front fighter who punches opponents into submission with gauntlets.
DLC-Exclusive Classes (Some of these may seem odd, but don't worry)
Sword Pegasus: A Pegasus Knight who favors the sword over the lance. Exclusive to Nino.
Lance Wyvern: A lance fighter riding a mighty wyvern. Spears foes from above. Exclusive to Seteth.
Bride: A blessed woman with a bow. Exclusive to Lucina.
Saint: A Valentian healer armed with light magic and phantom soldiers. Exclusive to Genny.
Witch: A woman cursed with terrifying magic... or dressed up like one. Exclusive to Clair.
Mechanist: A warrior atop a strange puppet who fights with daggers. Exclusive to Corrin.
Dread Fighter: A ghastly ninja who strikes hard with daggers and vanishes. Exclusive to Byleth.
Dancer Manakete: An elegant dancer who fights with a stone and can become a dragon. Can bolster the morale of nearby allies. Exclusive to Ninian.
To be clear, while each class normally only uses one weapon, the Priestess, Tome Troubador, Saint, and Maid/Butler classes would utilize certain staff effects (such as Freeze, Gravity, ect) in their movesets. There's already precedent for this with Lissa's War Cleric moveset, so it should be fine.
First things first, every character from the previous game returns (as is tradition with Warriors). Some characters' primary moveset or perf weapon have changed, however. Those will be underlined to stand out. Primary classes' perf weapons would be available in-game by default, while secondary perf weapons would be in the DLC packs. Tertiary DLC Classes and their weapons are italicized.
Rowan: Sword Lord (Enliron), Axe Wyvern (Rowan's Axe)
Lianna: Sword Lord (Faccina), Mage Knight (Lianna's Tome)
Anna: Outlaw (Anna's Bow), Fighter (Noatun), Thief (Anna's Knife)
Marth: Lodestar (Exalted Falchion), Tome Troubador (Marth's Tome)
Caeda: Pegasus Knight (Wing Spear), Sword Lord (Caeda's Blade)
Navarre: Myrmidon (Wo Dao), Thief (Navarre's Dagger)
Linde: Light Mage (Aura), Maid/Butler (Linde's Knife)
Minerva: Axe Wyvern (Hauteclere), Pegasus Knight (Minerva's Polearm)
Tiki: Young Manakete (Divinestone), Mage Knight (Book of Naga)
Celica: Lodestar (Beloved Zofia), Light Mage (Ragnarok)
Lyn: Myrmidon (Sol Katti), Bow Knight (Mulagir), Thief (Sacaean Knife)
Chrom: Mercenary (Falchion), Lance Cavalier (Chrom's Lance)
Robin: Mage (Thoron), Samurai (Levin Sword)
Lissa: War Cleric (Lissa's Axe), Light Mage (Exalt's Tome)
Frederick: Great Knight (Frederick's Axe), Lance Armor (Luna Lance)
Cordelia: Pegasus Knight (Cordelia's Lance), Mercenary (Sol Blade)
Tharja: Dark Mage (Tharja's Hex), Lance Armor (Tharja's Lance)
Olivia: Dancer (Olivia's Blade), Pegasus Knight (Olivia's Lance)
Lucina: Mercenary (Parallel Falchion), Lance Lord (Nidhogg), Bride (Thogn)
Owain: Samurai (Missiletainn), Dark Mage (Odin's Grimoire)
Corrin: Nohr Prince(ss) (Yato), Mage (Ginnungagap), Mechanist (Chakram)
Azura: Songstress (Blessed Lance), Light Mage (Calamity Gate)
Ryoma: Samurai (Raijinto), Fighter (Ryoma's Club)
Hinoka: Pegasus Knight (Hinoka's Spear), Archer (Pursuer)
Takumi: Archer (Fujin Yumi), Samurai (Takumi's Katana)
Sakura: Priestess (Spellbane Yumi), Light Mage (Bird Spirit)
Oboro: Soldier (Oboro's Spear), Archer (Surefire Yumi)
Xander: Sword Cavalier (Siegfried), Lance Cavalier (Xander's Lance)
Camilla: Axe Wyvern (Camilla's Axe), Dark Mage (Camilla's Hex)
Leo: Mage Knight (Brynhildr), Mercenary (Leo's Iceblade)
Elise: Tome Troubador (Moonlight), Maid/Butler (Votive Candle)
Niles: Outlaw (Niles's Bow), Dark Mage (Fimbulvetr)
Non-playable characters from the previous game also appear, but only in History Mode. As for their playability... just keep reading.
Darios: Sword Lord (Risyl), Brawler (Darios's Gloves)
Gharnef: Dark Mage (Imhullu), Samurai (Gharnef's Blade)
Validar: Dark Mage (Grima's Truth), Axe Wyvern (Validar's Hatchet)
Iago: Dark Mage (Iago's Tome), Bow Knight (Iago's Bow)
Of course, there would be a small handful of new OCs to go with the story, but for creativity reasons I will not be listing them here. As before, tertiary DLC classes are italicized, as are DLC Characters.
Shadows of Valentia
Alm: Conqueror (Valentian Falchion), Archer (Luna Arc), Lance Cavalier (Emperor Lance)
Grey: Mercenary (Zanbato), Brawler (Grey's Gauntlets)
Lukas: Soldier (Daybreak Lance), Great Knight (Lukas's Axe)
Clair: Pegasus Knight (Clair's Lance), Priestess (Clair's Bow), Witch (Death)
Mae: Mage (Book of Orchids), War Cleric (Mae's Axe)
Boey: Mage (Inscribed Tome), Thief (Boey's Knife)
Saber: Mercenary (Golden Dagger), Mage (Sagittae)
Genny (DLC): Saint (Invokation Staff), Sword Cavalier (Genny's Saber)
Mathilda (DLC): Lance Cavalier (Saunion), Axe Armor (Mathilda's Axe)
Eliwood: Sword Cavalier (Durandal), Lance Armor (Rex Hasta)
Hector: Axe Armor Lord (Armads), Lord (Regal Blade)
Dorcas: Fighter (Dorcas's Tomahawk), Brawler (Dorcas's Knuckles)
Rebecca: Archer (Rienfleche), Thief (Rebecca's Hunting Knife)
Nino: Mage (Iris's Tome), Outlaw (Black Fang Bow), Sword Pegasus (Wind Blade)
Jaffar: Thief (Deathly Dagger), Myrmidon (Black Fang Sword)
Ninian (DLC): Dancer Manakete (Ninian's Stone), Mage (Ninian's Book)
Raven (DLC): Mercenary (Basilikos), Fighter (Raven's Axe)
Byleth: Professor (Sword of the Creator), Brawler (Byleth's Gauntlets), Dread Fighter (Ashen Knife)
Edelgard: Axe Armor Lord (Aymr), Lodestar (Edelgard's Estoc), Dark Mage (Hades Ω)
Hubert: Dark Mage (Banshee Θ), Lance Cavalier (Arrow of Indra)
Bernadetta: Archer (The Inexhaustible), Thief (Bernadetta's Dagger)
Dimitri: Lance Lord (Areadbhar), Sword Lord (Sword of Zoltan)
Dedue: Brawler (Dragon Claws), Axe Armor (Axe of Zoltan)
Mercedes: Light Mage (Rafail Gem), Priestess (Talthum Bow)
Claude: Bow Wyvern (Failnaught), Mercenary (Sword of Belgata)
Hilda: Fighter (Freikugel), Lance Armor (Lance of Zoltan)
Leonie: Bow Knight (Bow of Zoltan), Lance Cavalier (Bladebreaker Lance)
Seteth (DLC): Lance Wyvern (Spear of Assal), Sword Lord (Seteth's Blade)
Flayn (DLC): Light Mage (Caduceus Staff), Soldier (Flayn's Lance)
Shadow Dragon, Awakening, and Fates
Jagen: Lance Cavalier (Jagen's Lance), Great Knight (Jagen's Axe)
Draug: Lance Armor (Draug's Lance), Brawler (Draug's Gauntlets)
Inigo: Mercenary (Inigo's Blade), Thief (Laslow's Dagger)
Severa: Bow Knight (Astra Bow), Mercenary (Selena's Blade)
Kaze: Thief (Kaze's Needle), Samurai (Hagakure Blade)
Felicia: Maid/Butler (Felicia's Plate), Mercenary (Nohrian Blade)
Roy: Sword Lord (Binding Blade), Bow Knight (Murgleis)
Ike: Vanguard (Ragnell), Fighter (Urvan)
Berkut: Lance Cavalier (Berkut's Lance), Archer (Berkut's Bow)
Ursula: Tome Troubador (Ursula's Tome), Thief (Ursula's Dagger)
Death Knight: Lance Cavalier (Scythe of Sariel), Myrmidon (Jeritza's Sword)
As with the previous game, there are History Mode maps. Some minor adjustments include more maps that restrict you to using specific characters (in addition to maps that restrict you to fairly-broad categories), some additional mission types (obviously), and a lot more character unlocks specific to this mode.
The main story characters, Marth, Chrom, Robin, Lucina, Corrin, Ryoma, Xander, Lyn, Celica, and all new Shadows of Valentia, Blazing Sword, and Three Houses characters are unlocked during the story. Everybody else is from here. Anna is unlocked the same way as last time.
Shadows of Valentia Map
Based on the battle at the border with Berkut's forces
Contains perf weapons and scrolls for all Shadows of Valentia characters
Also where you unlock Camilla, Sakura, Caeda, Lissa, and Draug, their perf weapons, and scrolls
Blazing Sword Map
Based on the battle with Ursula
Contains perf weapons and scrolls for all Blazing Sword characters
Also where you unlock Elise, Takumi, Navarre, Frederick, and Inigo, their perf weapons, and scrolls
Three Houses Map
Based on the battle at Gronder Field
Contains perf weapons and scrolls for all Three Houses characters
Also where you unlock Leo, Hinoka, Linde, Owain, and Felicia, their perf weapons, and scrolls
Binding Blade Map
Based on a map from Binding Blade, I haven't decided which map
Where you unlock Roy, his perf weapon, and scroll
Also where you unlock Oboro, Tiki, Cordelia, and Severa, their perf weapons, and scrolls
Based on a map from Path of Radiance or Radiant Dawn, I haven't decided which map
Where you unlock Ike, his perf weapon, and scroll
Also where you unlock Niles, Minerva, Olivia, and Jagen, their perf weapons, and scrolls
Warriors 1 Map
Based on the map where you "rescue" Darios
Where you unlock Rowan, Lianna, their perf weapons, and scrolls
Also where you unlock Azura, Tharja, and Kaze, their perf weapons, and scrolls
DLC and Updates
Adds a new History Mode map, the Villain Challenge
This map is similar to the Hero Challenge map from the first game
The "story" is that you're leading the villains to victory over their respective heroes
This is where you get to unlock Darios, Gharnef, Iago, Validar, Berkut, Ursula, Death Knight, and whatever new villain we get in the story, along with their perf weapons and scrolls
You can also get the secondary perf weapons and scrolls for the main story characters, Marth, Chrom, Robin, Lucina, Corrin, Ryoma, Xander, and Anna here.
Shadows of Valentia Pack
Adds new characters Genny and Mathilda
Adds Alm's Lance Cavalier class and Clair's Witch class
Adds three new History Mode maps where you may unlock perf weapons and scrolls for the new characters, as well as secondary perf weapons and scrolls for all Shadows of Valentia characters
Blazing Sword Pack
Adds new characters Ninian and Raven
Adds Lyn's Thief class and Nino's Sword Pegasus class
Adds three new History Mode maps where you may unlock perf weapons and scrolls for the new characters, as well as secondary perf weapons and scrolls for all Blazing Sword characters
Three Houses Pack
Adds new characters Seteth and Flayn
Adds Byleth's Dread Fighter class and Edelgard's Dark Mage class
Adds three new History Mode maps where you may unlock perf weapons and scrolls for the new characters, as well as secondary perf weapons and scrolls for all Three Houses characters
Warriors 1 Pack
Adds Anna's Thief class, Lucina's Bride class, and Corrin's Mechanist class
Adds three new History Mode maps based on Awakening, Fates, and Shadow Dragon respectively, where you may unlock secondary perf weapons and scrolls for all remaining characters.
As you can see, the three primary packs each add two new characters and two wholly new classes (one of which is on a base game character, one of which is on a DLC character), while the Warriors 1 pack just adds two new classes.
All costumes from the previous game are available still, plus some new ones like pre-timeskip designs for Three Houses characters, Fates costumes for Owain, Inigo, and Severa, ect.
All the stages from the previous game are used in History Mode, in addition to the new ones featured in FEW2's story.
While the villains would be made playable in the free update, they likely would not have supports or team dialogue with the heroic characters beyond a few exceptions. Their recruitment is not meant to be taken as canon.
The story mode has its own final boss, but Velezark can still be found in some History Mode maps. His battle strategy is a little different now; he'll use all of his old attacks during the first phase, and for the second phase start literally wielding giant weapons instead of only throwing them at you.