When they returned to Daybreak Town, the protagonist had plans to discuss the Darkling Heartless's search for a particular Keyblade wielder with the Union leaders, but they've instead found themselves in a desperate fight for their life. Alongside the real Union leaders, the protagonist is fighting a losing battle against Darkness, who plans to spread throughout the Dandelions should it win. While the group's efforts haven't been enough, there's one individual who's yet to enter the brawl.
The second half of Kingdom Hearts Union Cross quest 977 sees Ventus join the battle against Darkness while Luxu carries out the second task that he believes the Master of Masters assigned to him. This quest as a whole is the first of the last set of quests released for the game, and this writing conducts a recap and interpretation of its events to clarify the ending of the Kingdom Hearts Union Cross storyline — spoilers ahead.
Pure Light
Darkness is no longer interested in fighting the Dandelions. The entity is formless, so even when the group's combined efforts manage to dissipate it, it simply reforms. The battle's become a cycle, so instead, Darkness focuses its attention on Ven, summoning Darklings who, unlike the protagonist and Ephemer, claim Ven's the one they've been after all this time. It's a revelation that surprises the protagonist and confuses Ephemer, as the latter didn't understand Darkness's explanation regarding Ven's "pure light."
However, Ven's actions clarify things for Ephemer. He wakes up, and understanding his situation, doesn't hesitate to use the light in his heart to destroy the Darklings and dissipate Darkness again. When the entity reforms across the room, Ven voices that if he's pure light, and Darkness used him to reshape itself, then he'll just use his powers to reshape it again, only this time, he'll relegate it to a form the Union leaders can actually destroy.
Lauriam tries to stop Ven from attempting the plan but fails. Expressing the group's collective worry, Lauriam holds Ven back and then expresses his own fear of losing him like he has Strelitzia. The comment is his way of apologizing for his previous hostilities towards Ven and letting him know that he views him as a brother. However, the replacement leader reassures Lauriam, and everyone else, that everything will be alright. Then he springs headlong at Darkness, engulfing the room in a burst of light.
A Seed of Light
In the real Daybreak Town, Luxu and Darkness confuse each other. Luxu expected Maleficent's Darkness to be a part of the whole that was just fighting the Dandelions in the data world. He supposes that if that's not the case, then this Darkness must be acting of its own accord. As for Darkness, it was under the impression that the real world no longer had any Keyblade Masters, so it takes a moment for the entity to figure out that Luxu — the one tasked with watching things until the end — is the Master walking in on it and interrupting its attempt to check on the data world. Still, Luxu's role doesn't explain why he's here in the lifeboat lab.
Luxu expected Darkness not to know what's going on since it didn't thoroughly read the Book of Prophecies. Luxu is in the lifeboat room because Darkness's friend, the Master of Masters, told him to be. The Master permitted him to watch events between the Dandelions and Darkness unfold; he just can't interfere with any of it. "Look, but don't touch," he was told. He didn't understand it or anything else the Master said at the time, but it's been around five years since then, and he thinks he gets it now.
Luxu entered the lab under-arm carrying something swaddled in a white cloak and then accessed the room's computer terminal. Now, at this point in his and Darkness's conversation, Luxu's finished using the terminal to open up the lifeboat's middle-most pod. Contrary to what Darkness thinks, the pod isn't for Luxu's use. He's not using it to escape into the future, which would ruin his and the Master's plan. He's using it for the bundle he's carrying, which he demonstrates by placing inside the now open capsule.
He explains to Darkness that what he just put in the pod is the true Dandelion. The primary Dandelion that the Master of Masters planned to send into the future. While the face of the individual Luxu placed in the pod isn't shown, the cloak they're in is the same one Xehanort wrapped Ventus in after splitting his heart during Birth by Sleep. So, excluding any unforeseen convolution, Ven is the one in the pod. Luxu, as per the Master's orders, allowed Ven to deal with data-world Darkness and then placed his unconscious form here in the aftermath.
Who's the Real Dandelion?
Ven being the real Dandelion makes the most sense. Dandelions spread their seeds through gusts of wind. Ventus is a Dandelion, and his name means "wind" in Latin. He's the only person ever in Kingdom Hearts to wear the white cloak and the only member of the Dandelions with a heart of pure light, which gives a stronger meaning to Luxu's referring of the cloaked individual as the "seed of light." Ven also has memories of the Dandelions, making him a perfect waypoint. The only thing he lacks is the mediums to reform his friends' bodies when they arrive, but the Master explains that he's already taken care of that in the next cutscene.
As to how Ven retained his own body despite apparently using the lifeboats to get to the future: the white cloak theoretically protected him. Kingdom Hearts director Tetsuya Nomura has a habit of giving objects that hide character identities protective properties. Black Coats protect wearers from darkness, as does Keyblade Armor, which is also just literal armor. It wouldn't be surprising if the Foretellers' robes and masks protected them from something too. In which case, the white cloak could prevent Ven's body from being destroyed by the lifeboat.
The Purpose
Darkness remembers learning of the Master's plan some time ago on the outskirts of Daybreak Town. He had explained that it would take place in three stages: the creation of Unions, the Foreteller's Keyblade War, and then the Dandelion's final battle with Darkness in the sealed-off data world. The final phase would conclude when the departure of all seven lifeboat pods destroyed the world, which is where Darkness got confused. It found it strange that the Master, knowing all things through the Book of Prophecies, would waste his time on such a project.
The Master corrected it, though. The Book only knows what the No Name Keyblade sees, which is nothing compared to omnipotence. If the Master could become that through the Book, he'd have never let Darkness take a look. No, what's written in the Book doesn't matter at all, only the fact that its original copy is written in the future. Because of that, the Master has a universal waypoint, meaning he doesn't just have a waypoint for himself, but others too.
Luxu acts as the Master's waypoint because he has memories of him and possession of his eye, meaning the Master can regain his body if he travels into the future. As for everyone else, like the Master's other apprentices, Luxu has memories of them too, and through his Book of Prophecies, he can create life-like illusions for them to use as mediums as well. In fact, he can create life-like illusions of anyone in the Book for them to use as mediums.
The Master also told Darkness that he's going to travel into the future and take others with him when he does. Darkness assumed the Master was going to use the seven pods to take the "seven crowns" (the seven pure lights of the Union Cross era) and possibly even his apprentice with him, but the Master was cagey on those details. However, he did tell Darkness that, while the Book's contents don't matter in the grand scheme of things, they did show him one world of interest in the future, a world that he could never have imagined. This world was likely Quadratum.
Kingdom Hearts Union Cross is on Android and IOS.