I don't own the game, but I do have a DLC question. Well, a few.
- I know there's paid DLC and then there's SpotPass DLC. What's the difference?
Spotpass is free and it ranges from legacy units for skirmishes, shopping and hiring, to legendary weapons and actual extra story chapters.
DLC always involves new chapters with their own stories completely unrelated to the main plot(aside from three of the later DLC chapters), classic/new bgms and maps, with any further bonuses, like the legacy units, skills or classes being obtained after finishing the chapter.
You can get spotpass characters through a battle too, but they're just skirmishes, taking place in the usual story maps, and having little story aside from some generic lines of the legacy character.
- How does the game explain the characters from other games being in Awakening?
In the DLC, Chrom and his army goes through a dimensional portal to another world. Anyway, it's explained that the legacy characters are like "mirror images" of the actual ancient heroes summoned by magical cards to serve the will of the summoner.
An old man who kept those cards loses them, and asks the player's help to recover them. After you're done with helping him for the first time, he gives you one of those cards (Marth's) and the promises to give more later if the heroes continue to help him, in order to help them in their own journey.
The DLC units have a blue aura around them due to that. The spotpass legacy units don't have the same blue aura, but one of the menu describes them as phantoms, although, like I said before, the spotpass legacy units don't have much of a story. The player summons them from a menu and then their party appears on the map (Each party has the legacy character itself leading it and up to 9 generic units to complete the team).