When developing characters, their backstories, their personality; they end up taking life somehow, you know how they'd react in any given situation, you know them pretty much like yourself, since you came up with what makes them who they are.
So when you couple those characters into the story you are working on, give them a context and mix them with other characters you developed the same way, you don't even have to THINK about writing the dialogues, they just happen.
You know what they would say, and you know what they would do, some events will just pop up and enrich your story, sometimes involuntarily, if those events come in conflict with your story then it's best to rethink about the characters in play or to find something that would make this character act differently.
So many times in movies or TV shows they make the characters change radically and make them act against what was shown to the audience about that character. The point is it's better to give a reason for a character's action, to just make them do random things that end up serving only your storyline and not the character's agendas, it makes them one dimensional, hollow and make them look like...actors...
The most interesting thing is thinking of a narrative structure that puts YOU (the writer) into a situation where you wonder what the character would do...If YOU wonder what he would do, it means the character himself would be wondering at this precise moment.
And at that instant, if you truly want to make the game interesting, give that choice to the player...
Sounds awesome!