Undertale has pretty darn good character interaction. Especially due to the whole being able to learn about and spare monsters. The game definitely has a lot of personality. World building is.. decent. Though more is left unanswered than answered.
The Tales series has stellar character interaction, with lots and lots and lots of skits. Characters are always being chatty, and every time a skit is unlocked, Tales becomes a Visual Novel for a little white. I would say outside of the linear action combat system, skits are what the Tales series is known for. And skits are nothing is not a character interaction dump. World building is eh, it depends on the game. And even for some of the best entries in the series, leaves a lot to be desired.
If the Trails/Kiseki/Legend of Heroes series doesn't have as much character interaction as Tales, it's close. There is a lot of dialogue in Legend of Heroes games. On the other hand, Legend of Heroes excels as world building and has some of my favourite world building in a game series.
As far as Final Fantasy goes, Ivalice, Vana'diel and Hydaelyn all have great world building. Though some games in the Ivalice series are better than others at this. And Final Fantasy XII has very little in the way of character interaction for most of the game. Final Fantasy XII has a lot of exploration, and very little character interaction by comparison. And there are long sprawls where absolutely no characterization or human personality happen.
Now that Final Fantasy XIV is A Realm Reborn, there is a lot more NPCs with a lot more to say. And while you can choose to ignore that and the MSQ as best you can if you so want. I would say the game heavily involves and relies on a great deal of personality, with or without players to talk to. The same is true of Vana'diel.
Chrono Trigger is decent for its time. Though Chrono Cross doesn't manage to do much characterization for the sheer fact it has so many characters to characterize. Most characters don't get enough time or attention.
I have admittedly mostly played JRPGs. But for the sake of fair discussion and curiosity, this is limited to only video games, not just JRPGs or even RPGs.
Kind of hard for me to think of a Mario game with a lot of character interaction and world building outside of their RPG games like The Thousand Year Door. And Nintendo has seemingly moved far away from that direction. Mario Galaxy was decent, but building on that shard of the Mario universe, and characters like Rosalina hasn't been done since. Ironically, the character from Galaxy who has been built most on since, is Captain Toad.
The Legend of Zelda: Wind Waker, Twilight Princess, and Skyward Sword are all pretty decent in this regard. Breath of the Wild is a great game, but could have more NPCs with more things to say, in this regard. How good the world building is, depends on how seriously you take the Zelda timeline theory.
Visual Novels as a whole clearly excel at this because they're closer to a literary genre or at least medium than a "game".
So does the Adventure genre, including the Point and Click Adventure genre, if not especially. Or games similar to that genre. For instance, Touch Detective definitely features a great deal of character interaction.
Harvest Moon(Story of Seasons) and Harvest Moon-likes like Stardew Valley also feature a lot of character interaction. Not a great deal of world building, though.
Animal Crossing has very little in the way of world building. But character interaction is also half the game.
While Metroid and Dark Souls are an example of games with world building, but are defined by an almost complete and utter lack of character interaction and personalities to be around. With the exception of Other M, which most feel didn't turn out the best. Your friendly character interaction in Super Metroid is limited to a few space creatures on Zebes showing you have to wall jump.
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