The last very lazy hint for very lazy search. The hero's name is Dragon in Japanese.

2 days before my game will be revealed by itself.

Is it any of the Dragonball games?

No, the only thing in common is that both franchises is all about fighting one on one (at the same time),

Apparently no one knows what Google is.

Initial game description + the hints were confusing, terrible, and too overly descriptive at the same time.
I fear/dread/look forward to your upcoming description of the super mario bros series.

on-topic:Guessing it's a mortal kombat series game but can't be bothered to check which one.

I can say that this is slightly in between MK and Dragonball. But the last hint is huge.

Dragon in japanese is Ryu, so with this and other hints like "fighting one on one", "three projectile speeds", "big army organization" I'm thinking it could be some Street Fighter. But I don't think the "currently dead" plot fits?

Oh wait, of course it fits! I was thinking the plot description was about Ryu and Ken as his friend, but it actually was about.... Guile's friend (?) ... and Guile!

Thank you, thank you. You relieved me of this burden. It's Street Fighter V: Arcade Edition (2018). My character's name is Charlie Nash and he was killed in action, now returned from dead, it's official. My friend is definitely Guile as you guessed it, and the hero is Ryu. While Ryu likes to throw his hadoukens, my thing is to fire a sonic boom, which is much cooler (subjctive thinking).
https://streetfighter.fandom.com/wiki/Charlie_Nash

It's your turn from now on!

I'd probably find it much faster if I was better versed in the SF lore. The rest had me steered toward the right answer, but your hints about the plot had me thinking it could be something like Murdered: Soul Suspect.
Let's be honest, barely anyone play those games for their story, aint it? It was a good choice as a way to pick an extremely known game and still make it challenging.

Anyway, next challenge.

I need to find a cure for my sister so she can become human again. Her transformation that night was a very weird event. It's like we were being called to that clearing in the woods.
We've been traveling around defeating monsters, but we have no cure so far and barely a lead. Maybe we'll have luck in this next town?

We met a nice woman at the end of the battle and she invited us to stay at her house in the closest city while we're there. It's not a bad offer, especially because she also owns a store where she buys loot and sells equipment. I bought a slightly better sword and a pair of boots. The lady also helped us by recommending we ask the city's fortuneteller for any clues.

But first she insisted we dine with her. The food tasted great, but my sister was much happier before knowing what were the ingredients of our meal...

Come on people, this ARPG isn't going to name itself. We need guesses here. Or at least questions like... "How is the game's fighting system like" or " what kind of camera it has" or "does it have a cool fishing minigame?"

Does the game have any specific fantasy setting?

I have no idea what game is that, so try again.

Hmmm, I'm not sure what you mean by that, but there is a magic system. You collect jewels dropped by the monsters you kill and those jewels fuel the spells launched by your sister. You can combine up to three jewels into different or more powerful spells.