It'd be nice if it were similar to white knight chronicles, where you create a character for use online and in the main story, but he/she doesn't impact the story directly. Granted WKC isn't the best example of a stellar single player experience, but it gets my point across.
I'd be okay with that if your character doesn't stand around like a schlub the whole time with only two characters acknowledging your presence. I got the impression the avatar was just tagging along and wouldn't take a hint.
If there was one thing I took away from the cutscenes in Xenoblade, it's that any type of character creator in this game is going to have a breast slider like WKC did. (My god Venea! Did your tits have to be front and center in every cutscene you were in? And Seven, you're not helping things either with your chest piece macguffin right on top of your cleavage window. Though at least you weren't jiggling around like Sharla was all the time.)