FFVI Worlds Collide

That is a very interesting idea. We have currently been discussing character gating quite a lot. I figured experienced players may intuitively understand where to go next. For example, people who have played the game before could likely guess to try out mt kolts after getting Sabin. One of the disadvantages we are facing with character gating is a large skew towards characters like terra, celes and sabin vs others such as mog, gogo, and umaro. Finding multiple (to prevent linear paths) intuitive gates for them is very challenging and opinionated.

Changing the names of rare items to something descriptive might solve the intuition issue. It also opens up other fun possibilities such as an option for making the name of the rare items random things from other final fantasy games (spoon, black materia, kupo nut, gysahl greens, ...) and the descriptions can list what they unlock. I would probably not implement it by shuffling the rare items in with the esper/character/item rewards already in the game because that would either require adding about 15 more reward spots or every seed would not have every character/esper. It would likely be implemented by having each current reward spot potentially also give a rare item in addition to its usual reward.

I really like that idea C-Dude. Thank you for suggesting it.

I would really appreciate more feedback on this from everyone else as well! Even just stating a preference between key item or character progression would help. Both systems may be possible eventually but I am very interested in finding out how to best focus my time.

I think attaching the rare items to existing shuffled events is a splendid idea.  In fact, fixing 'key item' triggers to certain events would be even better, it would facilitate pathing through the randomizer, for both you and the runners.

For instance, if players know the Vargas fight will get them a key item (regardless of whether they get character, esper, or gear as well), then players will hurry there when they're confident they can best Vargas (even faster if they have Sabin to skip the fight).  This is how Free Enterprise handles gating; players go into Baron/MtOrdeals/Fabul/etc because they know they'll get a key item at the end of it.

A few additional thoughts for key items, in case you need more...
+ EnginePart (required to let WoR Figaro Castle submerge, granting access to Ancient Castle)
+ FireRods (required to start Thamasa Blaze event)
+ RustRid (not new, but you can move it off the seller into the rare item pool to gate Mt Zozo)
+ ClockKey (not new, but might be good to enable the time machine function of the Blackjack to go to the World of Ruin, if added to the rare pool)
+ PaintThinner (allows Haunted Owzer's Mansion to trigger)

EDIT: Actually, the RustRid Salesman in Zozo would be a good place to add a Rare Item unlock. Players would have to manage their money to buy it... his price might even be randomizable.
(I don't know if you've done something there already, I haven't had a chance to play through your randomizer yet. Scrambling to finish a hack)