Thanks a lot for the suggestions!
Pushing your first point further, maybe players could be twins or clones or dressed the same way with hoods/helmets/gas-masks over their faces, so that NPCs couldn't tell them apart. Something to consider, although of course you may lose something else in the process (character personality for instance, and the ability to have different relationships with different factions, as you mentioned).
It's another good point that players could have opposite goals. The way I am designing the game right now, the players can either ignore one another and do what they want, or work together. But having NPCs or events try to split the players up, making them target one another for potential rewards is a very interesting idea that I'll have to explore further. Especially with online coop, where players may not so easily become aware of another player's secret intentions (harder with split screen if you can see the other player having a chat with the 'enemy')
I definitely try to find any way of deepening the world through anything but written dialogue (it being the last trick to resort to), and if absolutely needed, to keep it to the point. The dialogue system I envision is way simpler than say Skyrim's and I don't actually plan on giving the players a 'voice' except through their actions (e.g. you don't actually agree to do a quest, you just hear about the opportunity to do so, and choose what to do with that information, ignore or act upon it) so I think the dialogue part may work okay with multiple players as long as they can't all speak with the same NPC at once.
Your idea for 2+ player dialogues is still interesting, and I may consider having variations in the lines of characters depending on proximity of other players for instance (if anything, just using the plural where applicable). I wonder if the idea of a player being able to temperate the 'damage' that another player does can be applied elsewhere in my designs, like for instance a player being able to calm down a faction (e.g. bribing) that another player pissed off, etc.
Finally, your point about giving the players a quick way of getting back together is something I needed to hear I think. I was caught up in the plan of making it a sort of punition if players drifted off one another, as they would have to gather back. I was going to even try to make it tricky for them to find one another, or rely on items they have to carry to do so, thus encouraging them to stick together. But it's worth exploring the alternate idea of allowing them freedom to wander and shortcuts to get back together easily. Food for thought!
Thanks again