I don't mind having to pay for an NPC to party with, but I would like it to be more like the NPC from FFXI with how you can level it, choose its role, and do quests specifically for it. If it loses a certain amount of durability and then returns to the guild and you have to buy a new one then I wouldn't be bothered to use it unless I absolutely have to. Maybe if it dies and you have to pay a resurrection fee wouldn't be bad (a fee dependent on the mercenary's level) but if you're not able to level it at least and give it new equipment then it doesn't sound like a lot of fun.

Also, you mention Cloud's squat motion. I was actually thinking the other day (maybe a week or so ago) that it would be cool to have that as an emote. And it would also be pretty cool to have the motions that characters did in past FF games as emotes too (I always wanted to do the sword spin that Cloud and Zack do lol).