The "story" for Kingdom Hearts should be stripped down and setup like this:
- Multiple worlds exist. Travel between them is special but not impossible.
- The Bad Guys want to "win" by doing something harmful to these worlds for their immediate power gain or furthering "the end game" (ie. beat Mickey Mouse or Magic Kingdom or whatever). This should involve something extraordinary that even the most powerful natives of that world couldn't handle themselves.
- The Good Guys clearly don't want The Bad Guys to "win" sets about stopping them correcting whatever it is. Sora, Goofy, and Donald come in and fix whatever it was that was broken/wrong whatever.
- The Good Guys vs The Bad Guys show down in the end.
Doing the other crazy stuff stuff with the story is where Kingdom Hearts 2 lost its way and lead to so many sequels that never amounted to much.
How did they not amount to much? Birth by Sleep is one of my favorite games in the series (and probably my favorite PSP game), while 358/2 Days, while lacking in various ways, includes one of my favorite characters in the series in Xion. I understand that it's easy to be dismissive of these games if you're not a fan of the series in general, but it's incorrect to assume that KH2 and the games that followed brought nothing worthwhile to the table.
I think there were interesting parts in those games but I couldn't tell you what happened in Birth By Sleep or 358/2 Days (I keep wanting to call it '365/2') or another game I can't remember the title for. What happened in those games is actually going to be relevant for KH3? I can't think of one important thing that needs to be carried forward where I am not even sure I understand half of it so I say abandon it.
This is a problem with a lot of "franchise games" where scattering lore all over the place doesn't enhance or enrich the game but dilutes it.