I've been reading trough this and I started thinking of something.

The Aeons tell us that The Shujin we meet is not the real Shujin, and that Shujin died long ago. It's his feeling that are preserved, his feelings were so strong that they took form. The same can go for Lenne I believe, as she so much wanted to tell Shujin that she loved him.

And it is possible in my oppinion that Tidus is a reincarnation of Shujin.
For the faith to dream up the citizens of Zanarkand, they need souls. Can the Faith create souls to insert into the people of dream Zanarkand? I'm not sure, but maybe this is what you meant about recycling souls. This does not seem impossible as it seems that the faith can manipulate pyreflies to their wishes.

Just some thoughts. Great theory though.