and yes, he got it working for the 1st district in traverse town... or sorta, he said it's hard because he doesn't know who he's giving the flight ability too, he made a moogle fly, or atleast gave it the sparkle.
Well, in lamen's term, yes, but to get into detail : Dynamic Memory Allocation, which means the data in that room is changed to specific data, but once you leave that area, the adress you changed the data of, refreshes, therefore, it goes to it's original state, and the code "de-activates", if you will.
I'm PRETTY sure it's attached to his model, considering he doesn't let go, unless they use the same model for the riku keyblade, anyways, the code hasn't been discovered to my knowledge, Sorry.
it's attached to "Riku's" model, the mysterious enemy, as for the other stuff, impossible, they're all "dummy's" which means cutscenes only, no moveset or anything. But giving them a moveset might make it work... that is if you could find out all that stuff, kinda like Roxas, Truth, and Ioan made the Hodded Roxas code.. (Final Mix exclusive.) although a code like that would be DMA