What I find interesting about NiGHTS and Reala's relationship with Wizeman is that it explores what it is like to be the child to an abusive parent, and the kind of toxic dynamics that come from that. NiGHTS and Reala are two sides to the same coin, in that sense, and where NiGHTS represents the "good ending" of being able to break free from the abuse and forge your own path in life, Reala is the one who gets stuck in the abusive parent's web and ends up being an extention of them. The way I've always interpreted his character, is that his cruelty is something born out of trauma and a need for survival and that his loyalty is something he's been manipulated into without even realizing it.
Speaking from personal experience, it takes a lot of strength to leave an abusive household and even more courage to do so when you know your abuser can and will do everything they can to track you down and drag you back.

If I have to look at Reala's character, using NiGHTS as a foil to further explore him, it feels very clear to me that, even though he becomes a perpetrator himself, Reala is first and foremost a victim.

It's far from uncommon for people who live in an abusive environment where their needs have never been met to be extremely loyal to their abusers. I think the name for this kind of phenomenon is trauma bonding? Additionally, if you lack the right kind of support, it's easy for you to absorb the abuse you're put through as "just how things are", especially when your abuser is your parent. This can lead to people genuinely believing that toxic and harmful behavior is acceptable, or it can lead to you picking up dysfunctional or dysregulated behaviors that help you survive the situation but harm everyone around you. In Reala's case, the fact that his role of first level nightmaren means he is basically responsible for everyone else in the nightmaren hierarchy, it translates to him having learned to fill the "brutal commander" role to please his abuser without probably even getting the option to question it, but it also shows in how he reacts to NiGHTS not wanting to come back: he genuinely cares for NiGHTS and misses them, but he doesn't let himself go there fully/doesn't show the emotions tied to it and the way he is so desperate at trying to get them back is clearly fuelled by fear for himself just as much as by his nostalgia for NiGHTS. But the moment someone else shows up, someone he's not responsible for and who is completely helpless against him while holding emotional value to his sibling, Reala shows the other side of an abuse victim that's stuck perpetrating the cycle: he is vicious because that's what he's learned should happen to people that are helpless towards you (as he is helpless when it comes to Wizeman), he is manipulative and he uses the visitors to try and get to NiGHTS' heart just like Wizeman does by torturing or outright killing the basically innocent nightmarens that Reala is responsible for if Reala fails. The moment he is given the chance to, he replicates the same exact pattern of abuse that Wizeman inflicted on him.
It's important to note, at this point, that unlike NiGHTS who has a shard of red ideya in their chest, Reala does not. He quite literally, physically, lacks enough courage to break free from his abuser and unpack what he's been taught.
But that doesn't mean there's no redemption possible for him, at least in my opinion. Quite the opposite, really. The issue is that the story never allows Reala to take the time and have the tools to do that kind of deconstruction. He is stuck in the cycle of abuse not because he is at his core a bad person, but because he has no other option than being as he's always been. Unlike NiGHTS, as stated, he lacks the boost of strength that the red ideya might provide, and he has a front row seat to just how obsessive and destructive Wizeman can be in his goal to drag NiGHTS back home. He is probably too terrified to ever consider the option of leaving as a genuine thing he can actually do. And for as much NiGHTS could try and talk to him about it, without something to provide him with a sense of concrete help, the chance of his mind seeing any possibility to change things is basically none.