Strong vote for instanced :3
Personal dream would be something along the lines of Wildstar (WS) with players very early on getting a free (story rewarded) inn room (FFXI like), for lore reasons at some point or right away I think it would be great to bind this place of respite to the mother crystal (this would help explain why you can reconfigure it so extensively, crystal mirage - makes soul bound furniture make more sense lol).
As you play you can make the room larger (add rooms/features), add small area outside larger and larger, unlock sky boxes (want your house to be an island falling from space? sure! Icy peaks of some mountain? yea! Secret waterfall? Luxurious apartment overlooking: Uldah, Limsa, Golden Saucer, Ishgard, Kogane? Titan's Heart? On Bahamut's back - go do Bahamut Ex first..., floating above a sea of clouds? Moon? Turn 9 Nael Van Darnus falling rocks, 1.0 Dalamud, Giant Bath House/Laputa/Moving Castle, End of Time (Chrono Trigger), airship? yea yea yea and yea).
Those towers, farms, fields, docks, airports, shops, mining caves, whatever - that they can't do in the current system because there isn't enough room and you have to share space.. not an issue now (well besides cost to make the asset lol so obliviously not all at once; however, some of these graphical assets are already made though (skyboxes and props needed to create an "Ishgard like atmosphere" or "floating island"). Make yourself your own slice of Ul'dah - invite friends to RP in it or whatever.
Can throw Cid and other NPC in for expansion quests, so you're not simply feeding the mother crystal furniture stuff into aether and just really making a "primal home" (although maybe a bit funny xD).
Just to be clear on the above some of it is just changing the skybox (making it look like you're falling through space could be purely a skybox) and others would be actual land templates. Changing the land should work fine so long as you can put stuff that doesn't fit into the new template into storage. These would basically amount to an area with nodes (sockets in WS) and open space for non-socket based decorations, like the sky pirate houses being sockets and the areas in between being great places to decorate.
Not only do all the theme concerns go out the window (it's an instanced area, if you suck at design and mix two complete "no nos" together no one else has to bare witness lol) you can also give players the ability to make nonsense scale and position. To stretch and place things in weird ways, that creative ability will allow people to generate absolute masterpieces - a really important tool in some of the crazy designs in WS.. like cities, Japanese water temples, underground bunkers, jungles, etc. A quick random aside would be I think being able to export your placement would be really neat feature, so the highly creative could share with the creative impaired but financially capable (has money to buy all the required pieces the blueprint needs). I imagine that being a nice forum thread "here is my floating shrine" , "here is my shinra office" , "mognet station!".
Can leave the current housing system the way it is, where they choose to have the inside instance but the outside be the neighborhood instead (or just give them both, people who own purely instance can place all their garden related/chocobo stuff in there and those who own a "real" outside can choose to put gardens there or in their instanced land - so feature wise it won't mean much).
Although personally I've always thought it would be cool if the current housing system moved into a Dark Cloud sort of build em up for FC. Throughout the story there are loads of misplaced people who need homes and help, so get in those quests like the miqote orphanage but for the FC. Place down a blacksmith and upgrade that building up getting bonuses. To prevent some "FC inequality" allow other players to visit and talk to npc too, so if your FC isn't warbucks rich they could still have a lot of bonuses - perhaps connect it to FC alliance idea. That sort of interaction would be a great time for FC to show off mega projects (giant airship in Mists) or something like world first statues.
Beyond some shop for useful and more likely goofy but fun items (and decorations) upgrading the npc would upgrade that specific plot's visuals and interaction*, as you collect the NPCs some will live in the apartment structure (as the FC chooses) so they can make room for new looks/content (like a benched roaster, so you don't lose out on your old work). Because it would be node based the game could load the area better as well ("cute miqo kupo blacksmith_3, tier 4, slot 10" rather than "all that player's ugly junk, who is never there" XD). Could still give ownership of a few of the houses to players instead of NPC I guess, but that might lower the strength of the "loads faster better" argument.
*In terms of each node offering the opportunity for fun interactivity: For example if you had an upgraded orphanage kids would run around the area and if you had play structure decorations (like in Gridania) they'd visit it. Moogles could sing door to door. Gobbies would start a paint bomb FATE war occasionally. Alchemist gives a high exp daily for those below X level and gives free fireworks (that will vanish when you leave the zone, and cannot be sold.. don't mess that up lol).
GW2 actually has a system a bit like this for their "FC" (guilds), but I've always thought first of Dark Cloud lol.
Then because the FC owns the whole area you can also show your airship/boats on the actual screen, up in the sky or whatever. Can upgrade your seasonal decorations to be on all NPC houses too. This sort of stuff allowing FC to have a very coordinated image, as well as having loads of opportunity for group projects. Although much harder it would be cool to see land templates and backdrops created for the FC system as well (like a "windurst" option, or Jeuno for the rich FC :P). It creates a rather large avenue of long term projects that have visible meaning - rather than in the basement and on a UI. A very large super milestone airship could actually be one you can visit and customize as a FC that hangs in the clouds above (being on the deck would be quite the experience when you look down and see the FC's settlement down below). Dock area for Grid/Ul'd might be a problem but I can imagine airships looking epic for all four areas, and boats for two lol.
Besides an obvious hogwarts like moment where you have your airship/boat visit another (willing) FC there could be other encouraged events via game. Like hiding eggs at another FC's settlement, taking part in a large scale mock battle on their territory, that Christmas tree event of course, practical jokes could be like leaving chocobo bedding everywhere on the streets (willing FC), players doing dallies/weeklies/fates at other settlements, visiting a new FC every other week could give the large FC reduced repair costs or something like that - encouraging them to visit different FC with their ship (that brings some NPC perks they've unlocked when docked).
I think shops that anyone can visit is a decent example of a perk that won't raise the barrier of entry for newer FC too much, since they can alliance/visit them, but have to be careful if you had like "100% exp buff, only applies to FC members" as then no one would join a guild that didn't have it.. ever lol (repair cost may be pushing it depending on potency, but something for them to have reason to go out would be good - perhaps reduced cost of airship fueling.. important for massive airships XD).