[RMXP] How to efficiently translate a game?

So how does one even translate a game? Do I need the actual RMXP to do it?
I am trying to translate a Chinese RM XP game by using DreaMaker.
I have successfully extracted the dialogue, but I seem to be having several problems...

1. Texts formatting looks very weird in game.

\sWhat... was that...? Such a strange dream.

At the second line, "Such a strange dream." it will pop out the screen, forcing me to turn it into this:

\sWhat... was that...? Such a
strange dream.

This kind of thing would have to be tested and fixed case by case, which is going to be very frustrating for me to do. And in this case, there luckily was an empty line for me to just directly shift the sentences where it should be. There are going to be cases that the texts will be very long, and will require even more extra space; extra space that DreaMaker can't provide.

2. Changing the name of the spoken character ends up disabling all the dialogue relating to it.

As seen before, the protagonist of the story is named Yaen, but the system seems to automatically ignore all the dialogues that I changed into Yaen; making him lose a big bunch of dialogues.

3. Item and system texts cannot be translated

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