In Hapymaher's case, the protagonist's and antagonist's perceptions (conscious, subconscious and otherwise) defined the setting at any given time, with some interaction from the heroines.
In that sense, the world was fluid, but vagueness about how much was reality and how much was dream was deliberately orchestrated the way it was, to give the impression of the lines being blurred between the two. World-building isn't just something like Dir Lifyna's grand setting, but also the more immediate setting. In that sense, Hapymaher does an excellent job. Moreover, even characters can be considered world-building elements, depending on their roles. I honestly consider Maia to be one of the single most powerful living world-building elements I've ever seen in a VN, lol.
Edit: I'm going to go ahead and clarify my viewpoint on what I consider to be world-building.
First, world-building is an aspect of creating the setting. The difference between the creation of a setting and world-building primarily lies in unique lore or aspects that require you to step beyond what can be called 'common sense' or 'things you should know as a matter of course'. As such, the creation of a high school setting in a charage wouldn't be considered world-building. However, the creation of a unique aspect of such a school - such as the election system in Primal Hearts - would be considered world-building, as this aspect does not exist as a base template of what a high school is.
Similarly, merely placing a story in a typical fantasy setting is not an act of world-building. However, adding unique cultural elements, filling in details of daily life for the average person, etc are world-building elements.
In the end, world-building is an extension of establishing the setting, where the writer fills in the gaps left by the template he/she is working from. Do you have elves? An elf is a template. What kind of culture do the elves have? That is world building (if you aren't working from an obvious template, lol).