
Originally Posted by
BG-57
From the gamewriters point of view, he a was a way to motivate Yuna to become a sphere hunter and run all over Spira, looking for clues about him.
From the story's perspective, his role is a little more unclear. As you mentioned his feelings of hatred and despair at his death got trapped in the Den of Woe and were perpetuated by the Pyreflies. That's why anytime he possesses someone, Pyreflies enter their body. In a sense, he's just a ghost.
It's a very Japanese conception of ghosts though. His traumatic death imprinted his negative feelings onto a place, where they have been perpetuated for a millenium by the Pyreflies. That's the sort of idea we see in movies like Dark Water or The Grudge.
As for his connection to Tidus, I agree he might have been dreamed up by the Fayth with Shuyin in mind. Surely many of the entombed Fayth knew him personally. It may partly explain how Tidus became smitten with Yuna. But I doubt he had any of Shuyin's memories.