Does it make he's or she's quest done if dismissing him/her from the party? I kind of wish to dupe Serafen or Xoti. What about romance?

Nah, this isn't BG2. Feel free to swap chars. out. I just wouldn't suggest doing whatever zone they focus on is all. 

 

Last I checked romance was hearsay. Someone on reddit claimed just about all the new chars. were romanceable except for the returning chars. But there's been conflicting statements on that, so who knows.