I feel you do a good job here of getting at our differences. A dramatic or narrative approach wants those goblins to terrorize the village so that PCs have something to do. An immersionist approach by my lights wants the goblins to terrorize the village because there's a socio-economic reason. There is a confidence (or if you like, faith) that such reasons will ultimately play out more interestingly in play.
I'm honestly
very sceptical that someone actually starts with socio-economic situation in the region and then extrapolates goblin raids from it, rather than putting goblins there and figuring out a diegetic justification for their raids afterwards.
We could be speaking from positions in one of the major divisions in game studies: narratology versus ludology. However, I would say my position is more skeptical. I resist finally categorising games in either of those ways. (Sometimes I picture that everything that has been called narrative until now is a primitive form of game, so that game both contains and supersedes narrative. How does it supersede? Through those facets a ludological perspective brings into focus.)
I don't think so. I'm honestly not a big fan of this division
in general, even more so when it's applied to RPGs.
From where I stand, the difference between "ooh dragons are cool, and fighting one in the ruins of a church of the Dragon God would be very dramatic, really highlighting how the religion was stolen and subverted by the priests!" and "ooh dragons are mechanically interesting and fighting one in a tight space where it can effectively deny large areas will create an engaging fight that emphasizes positional awareness!" is slim
(if not non-existent, as juggling narrative is the meat of the gameplay in games focused on that), and both are at odds with world simulation.
I'm not sure what you have in mind for "traditional". If you would feel more immersed not shackled to one character, I would say go for it. I've tried it - albeit, not as extensively - and while it could just be down to lack of the right structures, focusing on one character has so far given me the strongest feeling of being within the world.
Full disclosure: I hate the word "immersion" with a burning passion. I always feel like everybody talks about a different thing when it's mentioned.
The way I see it, immersion is a process of capturing a
feeling through play. If the source, a lightning rod, of that feeling is the character, then the world should bend for them, to enhance and sharpen that feeling; otherwise the feeling would be blurry and fuzzy, weak, becoming sharp only by an accident at best. If I want to, say, capture the thrill of cheating, then I want my character's partner to call them when she is oh so busy getting railed, not a minute earlier or latter.
If the lightning rod is the world itself, then the character is unimportant, and their needs and desires are entertained only so long as they enhance and sharpen the feelings extracted from the secondary world.
This falls within the definition of exceptional by my lights.
It would still be uncommon, I guess. RPGs usually focus on player agency manifested through the PCs, and the way I envision this example, PCs can't really do jack. The history of Psijic Order already happened, and the players can only learn of it.
...well, OK,
rewriting the history through meta-game means, by acknowledging that both the character, the lecture and the Psijics are fictional, would be extremely on brand for Elder Scrolls, but still.