Yeah, Serenity later gets a better sword named Elysium - once wielded by Cailissa Fellows, a mighty Valkyrie who is now a Serenthan goddess.
LSR's events are "semi-canon", I guess. It's a dream of Shinica's in canon. Only, it's based on what she knows. She didn't know about Ataraxis when she had the dream (she had it before she went to her boss room in LS, but after meeting Serenity).
Alexis's reveal in the dream? She's an artificial human made to save the world. The Ghost Dragon Sisters are replaced by Ghost Wyvern Brothers. She gets Aileo, a staff, instead of Misery's End.
I'm just glad to know that Serenity Horton won't be a one off character. Personally I think it's a waste to make her a protagonist for one mod/game then never again. And it's nice to know that she gets an even cooler sword (will it be white/gold with angelic looking patterns?). And regarding LSR's events, when you mean "semi-canon", you mean that the lore is canon but the boss fights aren't? Or that some parts of the game are canon and others aren't?