In my opinion,

Luna is Noctis' betrothed/engaged lover. She is also his majesty the prince's childhood friend and their families are politically tied, with strong alliance. However, at an early point in the game, Luna's kingdom was either destroyed or taken over by (I presume) Niflheim. After that she has been on the run for the remainder of the game. Noctis has not met her ever since.

When the peace treaty was established, Noctis meets a new blonde haired girl at the party (with Noct in a suit) named Stella. The familiarity of the hair makes Noct 'think' it was Luna. Thus he was heading towards her on the upper floor in front of that Etro Goddess painting. But, when she turned around, there was this moment where Noct finally realized it was a different girl altogether (that slow mow scene where she turns). Thus, the conversation becomes awkward. I can actually see Noct turning away immediately as Stella began to speak to him. This is an indication of 2 things:
1) He got the wrong person and
2) Nomura has stated that Noct is very 'shy' towards people who are not close to him, making him reluctant at first to speak to her. But he easily warms up to her to cover up that shyness and tries to 'act cool' by splurting jokes about giving 'nightmares' to her.


As for Stella, the scene where they were about to fight in a standoff is probably while Lucis was under attack. Stella either wants to take the Crystal for the benefit of Tenebrae or as allegiance towards Niflheim. Thus, making her reluctant to fight him, but inevitably has to.

At this point also, I think Noct defeated her in that battle. She says something like, "don't worry about me, live your own life'..... Thus, establishing that factor where they are 'unfortunate' enemies.


I also imagine, once Noct was on the run, Luna contacted him (finally) and asked to meet in Altissia to give him 'something'. I don't know, but I'm going to assume Altissia is a part of the country Accordo (Venice themed country with Leviathan), because the shot with Luna was taken there. There Noct and co met Luna.......and....



There's more to the theory.......but I'll leave it here for now......