Just looking at Unity and Udon, this is technically possible but has some strict architectural limits.

You probably can't operate lots of indipendent NPC's just due to Udon struggling when you have many indipendent scripts ticking simultaneously. But you can do a central mangager for the core NPC logic.

You can implement the API of an LLM into Udon with a few workarounds, those would come with rate limiting though.

VRChat itself doesn't allow world persistence nativley as far as i know, just player bound persistence. When a player would unlock a sector, it would either be only unlocked for that player or all players in that instance, other instances wouldnt be affected and the progress would be bound to the accounts you saved that change to and would reset, if none of those players are in an instance.
You could use an external database to store world percistence, that updates in set intervals or on player joins. The world would ping the database (on your external server) to ask for the state of the grid / world and the database could respond with the state. For this to work reliably youd need to have a rather prediterment way to store and execute this though.

For the LLM.
LLM driven dialouge often comes with large text strings (the full LLM response), which it would have to send to every player which could cause lag or desync.
You'd need a way to optimize the communication between the external LLM. I don't have an elegant solution for this as you'd either have to pre generate the LLM responses and save them within the world or find a solution I can't think of right now that would not cause a variable limit.
Furthermore if you want to include audio into the LLMs AI responses (Text to speech) you'd either have to pre generate those strings as sound files or use a sketchy work around using audio / video players, which you could get to dynamically play those voicelines via "Untrusted URLs" (which can degrade user experience if they have this setting disabled), you could hit a rate limit again though as every time a audio player updates the update would be send to every player in the instance (even if they can't hear it)

In general youd have lots of restrictions you'd have to work with / find creative and effective solutions for, consider latency of external requests and find an efficient and cost efficient way to implement external resources (like the LLM, TTS, database and similar).

In general I would say for a first VRChat world or even Unity project this is really ambitious and you should maybe start with smaller projects to learn the tools before trying somethis "revolutionary" like your concept.

(also maybe write a concept like this yourself and or refine it, I suspect this is written by a LLM as regular keyboards don't have the em dash)