#dragon blooded

Number 2: Dragons reproduce asexually. Their mating is more a meeting of the mind and heart (which is why dedicated sibling pairs, like Tiamat and Bahamut, are not a problem). Their development is highly mutable, and dependent on personality and environment. Which is why there are so many kinds of dragons, and why this form of procreation isn't a problem for them.

(They also don't really care about gender, we find out in later game; they use pronouns and gendered language, but it's more like they pick it out of a hat and also I think it's in part how mortals parse their draconic language and identification of each other.)

In the ARR patches, the Ishgardian church's story about the ancient Saint Shiva is "she lay with dragons" and...sorta? Again, not necessarily sex as we primates manage it, but there was a romantic relationship that's one of the central elements of Heavensward's story.

Number 3: Dragons do not turn into people. Not natural born True Dragons, anyway. There is one who uses a simulacrum/homunculus that he controls in order to walk among people, but it's an artificial puppet body created via certain methods.

Heretics can sometimes turn into dragons--sometimes temporarily, sometimes permanently (not always their intent). They manage this by drinking dragons' blood (willingly given or not, depending on situation). There's also some plot points in HW where we learn some people in the past partook of a dragon's internal source of power and now it's spread through uncountable descendants--the reason for Dragoon abilities and heretics able to tap into that and become draconic.

Certain characters in certain questlines have noticeable powerful aetheric abilities and dragons can sense the connection--because one of their parents had imbibed dragon blood. There's also a quest where a Dragoon, who by training already has an "inner dragon" awoken and tapped into, is forced to drink dragon's blood and nearly loses her sanity and self, the attempt to transform her into a mindless beast (and the source of some of the Horde's shock troops, the characters realize) an element of the story, and can she overcome it.

(these side quests were part of my inspiration for Aeryn's unexpected backstory "Bearing Sins of the Past")

Number 4: There are dragon legends in the East, but only some have to do with True Dragons descended from the First Brood. We eventually learn Seiryu of the Four Lords is not a dragon, though often is mistaken for or described as one.

There are also throughout the world large flying lizards, dinosaurs, and other big reptilian creatures native to Hydaelyn, but not related to the First Brood. They're usually common animals with no intellect.

(This is because world lore writer Banri Oda just loves dinosaurs)

SO! All that said, what's this mean for making a half-dragon OC? Well, there's options!

To be lore compliant, someone of Coerthan descent and involved with, or from a family involved with, heresy (per the Ishgardian definition) can have draconic features, maybe try to pass themselves off as Au Ra, and/or have the ability to transform, either with a catalyst (blood, alchemy, a spell tapping into their inner dragon/draconic heritage, whatever) or because it's become an inherent part of them. Think draconic-blooded sorcerers from Dungeons & Dragons. They get their inherent magic due to draconic ancestry/influence somewhere in their lineage.

There's also always the mistaken/lying element; maybe the character thinks they are, or something has to do between their family and legends of the auspices and Four Lords. One of the things about FF14's lore is a lot of it is given in world and in characters; some of it is known to be wrong or misrepresented or incomplete etc., to give the devs wiggle room--as well as us as players.

One can partially ignore canon and say yeah, a humanoid parent boffed a draconic parent, in whatever form, and now this unlikely one in a million chance (or not, if we're already throwing away some lore) offspring is around and grown into an adventurer.

I've also seen folks portal in their OC from another fantasy setting where such things are more plausible, such as D&D (Baldur's Gate 3 is the current new hotness) or Warcraft (where it's honestly more assumed, as I can't recall an actual canon half-dragon but that's always a popular RP concept).

So while on the surface, some may say "no, that's not canon because--" there are ways to make it work within lore, if not how one usually thinks of "half-dragon" or "dragon-blooded" (tho kinda in the D&D sorcerer sense, IMO).

Or you throw out canon, and tell folks "I know the lore is X, but for my character's story I'm headcanoning Y instead." And then block any fussy attempts at lore policing.

Or just use the power of crossovers and portal stories/isekai to make it work, and again tell lore police to screw off.