From what I've spoiled (and I'm glad I did spoil it, to alleviate some curiosity about the game compared to the first), there's a greater volume of "side story" and a shorter volume of main story but together, it's a larger volume of story than the first game, and it attempts to shift the axis of the story by some degree away from a "core group of friends in support of a hero" so as to include some meaningful content about the lives of others. And it might be better to think of it as a drama rather than a heroic quest. Though all this talk about stories that require esoteric knowledge as being more creative than others surprises me, because both Blade and based on what I've seen, X, have very interesting and creative stories, which should be a conclusion most customers reach. (The first being a heroic journey in a world of two gods that were both characters and settings for a story. And X, a story about a US colony making an alien planet its home while its citizens face the drama that results from the Earth's destruction in the crossfire of alien warfare). Though admittedly my opinion comes from the Nintendo afficionado side rather than a JRPG afficionado side.
I haven't played Gears or Saga, but my hunch is that as a Nintendo subsidiary, Monolithsoft and Nintendo blend their values to create a unique JRPG and perhaps story that can be appreciated by more customers than those traditionally interested in that kind of game, because they (including Monolithsoft) feel it can lead to a better received game overall. Nintendo makes mechanics focused games, and their customers may have that as part of their tastes too. Some go so far as to hold mechanics as the highest value of games and dislike convoluted stories. I almost felt dirty for enjoying the story, world, and yes, the fruit of the graphics of the first Xenoblade :-D
While definitely Japanese made in aesthetics and story, and hence can be appreciated by those traditionally interested in JRPGs, decisions regarding the series' gameplay were I think to make a product that new customers (including Nintendo's traditional customers, who should definitely be considered as potential new customers) could enjoy as well. (And to be blunt, I think for X, open world with a more realistic appearance, and even NLA, were for the players in the West). While some would understandably be concerned about it, and be skeptical of the attempts to get new customers interested in the series, it's rather commendable of Nintendo to dare to consider the JRPG and the Xenoblade series as having something uniquely entertaining that can reach more people. I definitely felt the first game was a breath of fresh air and something excitingly different from Nintendo, with an epic scope, more mature nature, and yes, more story with many new characters, that I was amazed to see them offer, and I hope they continue to perfect and offer games like this.
I'm very much looking forward to the time when Overside shares his thoughts on the story, though, maybe it does have an esoteric dimension to it just as the first game did but many overlooked, to his chagrin ;-)
Though I'm pretty sure Frost Glass gave me the most trouble. Either that or Ice Cabbages I forget. One of the Valak collectables.