I have to be careful with it, since I don’t want to assume any choices. Also, there is no way for me to know what choices you made in LoaW, which means that I need to ask in Lost Heir.
That said, yes, there will be some customization. Gender, race, geneology, and morality will need to be asked. Some of the finer details won’t be mentioned, allowing your own head-canon to fill in the details.
Yes, having the greatest wizard in Daria’s history showing up will have some very interesting possibilities. 
I’ve got a lot of it done already:
- All known bugs have been fixed for all 3 games. Even those who don’t get the DLC will enjoy this. Some of the bugs were more severe than I thought. You can check the Bug threads (go to the first post in this thread for links) if you’re curious about them.
- A couple of free scenes have been wrote for LH1. These scenes lead into the optional DLC, but they give some new scenes for everyone, even if you don’t purchase the IAP.
- The main intro/story scenes, appearances, and 9 perks have been written into LH1 and LH2. Originally this DLC was for perks/advantages, but I couldn’t resist including some cool plot too.
My time is going into getting Last Wizard released, but after that, I will return to finishing the Legacy. I still want to include:
- Some alternate scenes based on morality and race.
- Some major perk scenes through LH3
- A major conclusion to the plot added with the legacy, which will resolve in LH3.
Fun stuff!