I also dreamed that there was this video game based on the Mario movie, except it was sort of this live action/"realistic" style where Mario actually looked like Crisp Rat. You could play as Mario, Luigi, I think Wario, and also create your own character; in my case, I created either my high-school self-insert OC Yar Kramer, or the updated trans version Ellen Kramer. You might have been able to also add another OC partner, but the dream didn't provide any details there.
There was this base-building thing where each character could place their house in an arbitrary place in some town in the Mushroom Kingdom or whatever. You could also "upgrade" each house, which would change your character's costume; in the case of your OC, it added a balaclava which hid their hairstyle and most of their face. I tried to undo and redo the upgrade a few times to try to get rid of it, but no dice. Also I think in order to upgrade Mario's home, you first needed to have Luigi move in with him.