Heavily subjective area - so I'm treading as lightly as possible but my 3 cents are ->
My friends and I ALWAYS ignore "story characters". It ruins the immersion of dropping ourselves into the realm and playing as our avatars of sorts. I really liked how DOS1 had story characters that could be added to the party if that's what you wanted, but the main characters were your creation! The tags are interesting but as others have noted seem limited or forced for our custom characters. After a few of the dialogue options, I restarted without any tags (outside the forced ones). Now I worry that I might be hurting my success in the game by not having added any. All in all my first impression is that I don't like the system nor do i see an easy way for you guys to fix it. Sorry to be unhelpful on this one.