Not answering for all feminists, just for myself as an ally.
1. Is it to achieve more favorable portrayal of women in video games. What does this mean specifically? What does it NOT mean?
My personal view of feminism in videogames include absolute homogeneity, equality and balance in the industry as a whole. I want a roughly balanced gender ratio in all types of characters (protagonists, antagonists, secondary characters and so on), a deconstruction of gender roles (that is, equal depictions of men adopting traditionally female roles and traits, women adopting traditionally male roles and traits, men adopting traditionally male roles and traits, women adopting traditionally female roles and traits, men and women adopting a bit of both, genderqueer, agendered and intersex people adopting traits of both or neither, and so on). Of course, I don't expect this to happen in every single game, but in the industry as a whole. I'd like that for every game where a manly man does manly things and for every game where a womanly woman does womanly things, there's a game where a womanly man does womanly things, one where a manly woman does manly things, another where men and women do a bit of both, one with genderqueer, agendered and/or intersexed protagonists and so on.
I want, above all, variety. I want a balance in sexualisation. I want everyone to be sexualised equally and for there to be instance of non-sexualisation and for non-sexualisation to be doled out equally as well.
2. Is it to invalidate and/ or deny/reject the fantasies of less attractive/ suitable men/ lonely men? Yes or no?
I don't really care about that. What I want is for the videogame developers to stop assuming their audience is exclusively straight, cis, white and male. If we want to cater to the fantasies of the less attractive or lonely, that's fine by me, I just hate the idea that the only unattractive or lonely people are the straight cis white men.
3. What is an ideal, none sexist/ no tropes involved female character? Does she have any romantic relations with men? What kind of men does she have these relationships with?
I think that 80% of the sexist tropes are sexist because they are applied in very one-sided ways, or within contexts of inequality. The bad thing about the damsel in distress trope is that when it happens to male characters, no male player thinks they are disempowered because they have a plethora of empowered male protagonists to make up for kidnapped, tortured or murdered male characters, while the same cannot be said for women.
In general, I want tropes to be applied equally and for there to be a balance of gender ratios. That should get rid of most of the sexism in tropes.
As for the "ideal" female character, I'm not a woman, so I don't really know what would make a good female role model. I would personally like to see non-sexualised, older (especially elderly), iron-willed, strong, hypercompetent women (who have meaningful relationships with women, primarily, instead of with men) as protagonists, but that's just personal preference.
4. What are female fantasies like? How are men in these portrayed?
This isn't a very good question. A lot of female fantasies are warped by the patriarchy (see: Twilight and 50 Shades of Gray, or fan fiction in general), so it's better not to emulate things just because they are female fantasies, or you run the risk of ending up with pretty misogynistic stuff. In general, it's best to stick to "hot men" and "meaningful, egalitarian relationships" instead of looking at what currently passes for "female fantasies."
5. Can fantasies just be fantasies and be left alone or must they be eliminated?
I don't think anybody is advocating for the elimination of fantasies. I think that when (straight) male fantasies are being discussed, there are two things that come up: A) There isn't an egalitarian representation of female eyecandy, and B) A lot of male fantasies are demeaning towards women, and it would be nice if this wasn't so popular and so common and passed off to women as some ideal to achieve (that is, nobody wants to take away your fantasies of treating women like subservient sexual objects, but it would be nice if that wasn't something women were told to aspire to).
6. What is the legitimacy of the phrase/slogan "WHAT ABOUT THE MENZ????" does it add or take away legitimacy from the feminist argument?
I think it can be a great tool to remind men that feminism isn't about them. Feminism is not equalism or egalitarianism, it focuses primarily on how gender inequality affects women, and how to solve the problems that affect women. Taking away the focus of a discussion onto men is undermining feminist discourse. Nobody wants to prevent men from talking about their issues, but it's become an almost constant and invariable problem that whenever feminism tries to address problems that affect women, someone will jump in and start complaining about how things aren't roses for men either, which adds nothing to the discussion (because it doesn't address the original point, which was how X affects women), and it instead serves as a diversion tactic to shut down feminist discourse.
7. Do male stereotypes also serve as male fantasies? Is this good or bad or neither?
They damn sure do. A lot of male stereotypes play up to male fantasies, particularly those that have to do with strength, fortitude, competitiveness, aggression, conquest, dominance, violence, control, agency and action.
The only thing inherently bad in these tropes is when people defend the idea (whether appealing to biological determinism or other claptrap) that these tropes must always be male-centric, or that the stereotypical female tropes can never be applied to men. Tropes are not inherently bad, they are tools. And like tools, they can often be used to perpetuate oppression.
NEW: #9 What are some real-world examples of how video game sexism has concretely harmed people?
Take any woman who obsesses with finding herself a boyfriend or a husband because the media (of which videogames are a part) has taught her that men are the only ones who have agency, power and control. Children's toys (of which videogames are a part of) teach boys how to fight, build, compete, destroy, control and overcome challenges, and teach girls how to be homemakers, child caretakers and take care of their appearance. As they grow up, their societal gender roles are reinforced by the media, which portrays an overwhelmingly majority of men in the roles of agents who make decisions, perform actions and achieve goals, and women as girlfriends, mothers, wives, daughters, sisters, lovers, grandmothers and otherwise secondary characters whose worth depends on their relation to a male character. This affects the way men and women view the world, with men being empowered to go out and get stuff done while women are encouraged to find a man, take care of a man, pop out babies, take care of the babies, grow old, take care of everyone in a grandmotherly way, and finally die once they have outlived their usefulness.
And this, of course, creates instances where women have come to actual harm for straying outside their established gender roles. A straight woman who is mistaken for a lesbian for straying outside the rigid boundaries of her gender role might be the victim of a hate crime as if she was LGBT+ (though in that case, it's not a consequence of pure sexism). Women who act like men in terms of sexuality might be raped or otherwise victimised because they are "sluts" who were "asking for it", women are the victims of domestic violence or are in abusive relationships might greatly resist the idea of leaving the man they are with because they have been raised to believe that only men are capable of agency and power, and that they are not capable of making it on their own (a message that is reinforced every single time the media portrays a woman needs a man to save her).
NEW: #10 Are men or people that play games with 'damsel in distress' such as Zelda evil?
I don't think anyone ever suggested that. In fact, I think that several people (myself included) have suggested the exact opposite, that sexism doesn't automatically make something (or the people who make use of it) evil.
NEW: #11 Violence is a perpetual theme in video games, Are females an unacceptable recipient of violence in any/all cases?
I think violence against women is a VERY touchy subject, but that you can sidestep that issue as a videogame developer in two simple ways. A) Make no distinction whatsoever between the violence against men and the violence against women. B) Make the recipients of the violence a group with an even gender ratio, where the men are portrayed exactly like the women, and there's absolutely no difference between them.
NEW: #12 What is an acceptable/ politically correct female antagonist?
Any female antagonist that is crafted with the notion that the audience will contain women is more often than not already on its track to being acceptable. That means no sexualisation (unless it's the norm among all villains and applies equally to both genders), and avoiding the "women are unsuited to melee combat" trope that makes women archers, minionmancers and magic-users. If it would make sense for this villain's personality to go toe to toe with the protagonist, there shouldn't be a contrived reason why she should stay away from melee. Making the protagonist also female would be a great way to sidestep any "violence against women" issues.
In the end, a female villain should be crafted just like a male villain. Not because maleness is something women should aspire to (though I think that destroying gender roles is a positive thing), but because we shouldn't have traits that are considered "male-only" or "female-only".