Nikkari Aoe is a wakizashi-class sword spirit who resides in the citadel as a touken danshi. Originally forged as an ōdachi by Aoe Sadatsugu in the year 1207, his blade was later shortened into its current form. Over the centuries he was owned by Toyotomi Hideyoshi and by Nakajima Shuuridayuu, and it is the latter owner who is tied to the legend that gave him his name. According to that story, Nakajima was staying at an inn when a woman and a child appeared before him, giggling unsettlingly. When they refused to identify themselves and continued to advance, he beheaded them in a panic. In the morning he found only two stone lanterns with their tops cut off, realizing he had unknowingly slain ghosts. The blade was therefore named Nikkari, meaning "grinning" or "smiling," after the eerie laughter of those apparitions.

As a character Nikkari Aoe carries an air of mystery. He is frequently seen with a small crystal ball or fortune-telling orb, reflecting a strong interest in the occult and the supernatural. His own history with a ghost story makes him naturally inclined toward such topics, and he often references legends or speaks in a way that hints at hidden knowledge. Despite this enigmatic exterior, he is fundamentally a kind and considerate person who genuinely cares for the well-being of his fellow sword spirits. He tends to support his comrades quietly and offers guidance when needed, often with a gentle smile that can seem knowing or mischievous. His personality strikes a balance between the eerie connotations of his past and a warm, approachable demeanor in daily life.

Within the story of Zoku Touken Ranbu: Hanamaru, Nikkari Aoe serves as a supporting presence in the citadel. He is part of the community of sword spirits who protect history from the Retrograde Army, but his role is less about taking center stage in combat and more about contributing to the everyday life and camaraderie of the citadel. One notable instance occurs when some of the younger swords mistake a newly arrived figure for a ghost; Nikkari is called upon to resolve the situation because of his familiarity with supernatural matters. This illustrates how his unique background makes him a resource for his companions when the unexplained arises.

In terms of relationships, Nikkari Aoe interacts with a wide range of other swords, often offering counsel or sharing his expertise on folklore. His calm and slightly teasing manner allows him to get along with many personalities, though he can come across as elusive to those who do not know him well. His bond with the citadel's inhabitants is shown through small acts of care and his readiness to help whenever a strange event occurs.

Nikkari's development in the series is subtle rather than dramatic. He does not undergo a major transformation but instead becomes more integrated into the group, his mysterious habits accepted as part of his character. His presence adds a layer of depth to the citadel's atmosphere, reminding viewers that each sword has a unique history that shapes who they are.

As a sword spirit, Nikkari Aoe retains the abilities tied to his origin as a wakizashi. He is agile and capable in battle, but his most notable trait is the legendary claim that he can cut even incorporeal beings, a direct reference to the ghost story associated with his name. This ability is not heavily emphasized in everyday skirmishes, but it underscores his nature as a blade with a particular affinity for the supernatural. His combat style is likely swift and precise, befitting a wakizashi, though the Hanamaru series focuses more on slice-of-life moments than on detailed battle sequences. His crystal ball also hints at an interest in divination, though it is not portrayed as a combat skill. Overall, Nikkari Aoe is a character defined by his folklore-laden past, his calm and caring personality, and his role as a knowledgeable and supportive member of the citadel community.