Obviously, his close friends like Sasuke and Sakura would be likely to be affected. Since they are often around Naruto, they would be the first ones to experience the nightmares he creates.
His sensei, Kakashi, would most likely be affected as well. Kakashi is not only Naruto's teacher but also someone who is often involved in Naruto's growth and development. So, if Naruto starts creating nightmares, Kakashi would be right in the middle of it, trying to figure out what's wrong and how to stop it.
Obviously Naruto would be the main character as the title implies. He is the one creating the world, so he would be at the center of the story.
In the 'naruto creates nightmares fanfic', it might be that Naruto enters a strange dimension during a mission. In this dimension, his thoughts and emotions take a dark turn and start manifesting as nightmares that not only affect him but also seep into the real world, affecting his comrades. As he struggles to break free from this dimension, the nightmares keep spreading and causing chaos.
Hinata would also be highly affected. She has always admired Naruto from afar. By seeing his memories, she would understand him on a whole new level, his struggles, his hopes, and it would likely strengthen her feelings for him even more. And it could also change how she interacts with him in the story.
Sasuke's relationship with Sarada could also be affected. If Sarada experiences things in the past related to Sasuke's family or his past actions, it could make her understand her father better. Maybe she'll come back with a new understanding and they'll have a more open relationship.
There could be the predecessors of the characters from the main game. Maybe the early versions of Six or the other kids we see in the original 'Little Nightmares'.
In addition to Sasuke, Kakashi, and Sakura, other characters like Iruka sensei would be affected. Iruka was one of the first people to believe in Naruto. Naruto's death would be a huge blow to him. Also, the villagers of Konoha who had started to see Naruto in a new light might have to re - evaluate their views. And characters in the Land of Waves, like Tazuna and his family, who had come to rely on Naruto's help, would also be impacted. They might lose hope or face greater danger without Naruto there to protect them.
Sasuke would be one of the most affected. He and Naruto had a complex relationship, from being rivals to friends. Naruto's death would leave a huge void in Sasuke's life. Also, Hinata. She loves Naruto deeply, and losing him would be devastating for her.
Well, obviously Naruto himself would be the main character. There could also be his friends like Sasuke and Sakura, who might be involved in the interactions between the two Narutos. Maybe they are confused at first by seeing two Narutos, but then they help them figure out what's going on.
Obviously, Harry's closest friends like Hermione and Ron. They would be devastated. Hermione would probably be racked with guilt for not being able to prevent it. Ron would be angry and at the same time lost without his best friend.
It could still be Naruto himself. Since he's the central character in the original series, many fanfics would likely continue to build on his story.