Lyon is the Prince of Grado. He's Ephraim's and Erikia's friend, but he becomes possessed by the Demon King, and obsessed with ressurrection. So he brings the dead king of Grado back to life, who in turn declares war across the entire continent. So you go on to try and quell the war as Erikia at the beginning of the game, but then you locate your brother Chrom, who then goes on to fight with you. But you know there's two places you should go; Grado to defeat the king and some other country (Jerall or something) to gain allies. I imagine you're just at the point where they've re-grouped, so I won't reveal more plot points

Lyon is the Prince of Grado. He's Ephraim's and Erikia's friend, but he becomes possessed by the Demon King, and obsessed with ressurrection. So he brings the dead king of Grado back to life, who in turn declares war across the entire continent. So you go on to try and quell the war as Erikia at the beginning of the game, but then you locate your brother Chrom, who then goes on to fight with you. But you know there's two places you should go; Grado to defeat the king and some other country (Jerall or something) to gain allies. I imagine you're just at the point where they've re-grouped, so I won't reveal more plot points

Very good SS telling.

As for Fire Emblem or Blazing Sword.

The game is set on a different continent of Elibe.  The story revolves around that in the distant past humans and dragons worked together.  Eventually humans fought the dragon through greed/fear/power in a great War calling the Scouring.  The Dragons were defeated and what was left of them vanished. 

You start the game as a tactican (not an actual unti like in Awakening) and work with Lyn (more Swordmaster than Lord) for ten chapters in a quest to prevent her evil great uncle from ascending the throne.  The next twenty chapter revolve around Eliwood (typical lord) and Hector (a more sturdy Warrior/Berserker), and later Lyn rejoins, fight against the Black Fang.  Controlled by a necromancer, the Black Fang are a group of beasts/undead that kill people for thier quintessence or life energy and plan to use it to open the Dragon Gate (where the dragons hid after the war) to start the conflic anew. I won't reveal more as this is enough to get the jist of the story.

This sets up for the events for Sword of Seals.....

Which we never got. :(

Most characters are recruited by talking to them with Chrom, yes, although a handful have other requirements. Regarding Anna in particular, you do not recurit her during that battle, so don't sweat it.

And I always reset. Never leave a man behind!

So here's a result that shocked no-one: