A few points.
1. This part isn't really applicable for anything within the last decade. Final Fantasy VII, the example you use, goes along with an age where game localization was a very low priority. Times has changed, and you will be hard pressed to find any JRPGs come out with similar translation errors. In fact, the only one that pops to mind for me is that typo at the end of Phoenix Wright 2, and that's considering every single Japanese game I've played for the last 5 years.
2. The broad stories of JRPGs are generally fantastical in nature, that much is true. On the other hand, I find the example you use for western games, Dragon Age, to be as generic as you get with an overall plot, and it confuses me how anyone can actually prefer the latter. Dark Army shows up, you go fight it and win, then end. As for believable character motivations, your own games betray your points. FFXIII, for all its high concept philosophizing, can have your character's main motivations be distilled down to wanting to save one's family members. Sazh for his son, Snow and Lightning for their fiance/sister, and Hope unable to forgive Snow for killing his mother. In fact, this family based motivation even shines through in FFVII with Barette, who's relationship with this adoptive daughter is far stronger than most people give credit to his character.
3. On protagonist ages: young characters are common place, but older characters are not rare either, far less so than those that like to use this stereotype seems to realize. The easiest example, once again coming out of Final Fantasy, is VI and IV. But beyond that, there's is a cultural gap between the Japanese view of growing up and that of the West. Within children they see the potential for change and advancement, and that potential deteriorates and hardens as they age. You can attribute that to a general sense of conformity in all Asian societies if you want, though that's a discussion for another time.
To put the last point simply: within Japanese media, they do not treat children like children. They are not talked down to or lorded over, and are placed into a setting where they have the same balance of power as adults of the setting.
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