One idea could be that Happy's death shatters the Fairy Tail guild. Natsu, being his closest friend, goes into a deep depression. The guild loses its usual cheer and the members struggle to come to terms with the loss. They might hold a grand memorial for Happy, and throughout the fanfiction, it could show how each character copes in their own way, like Lucy writing in her diary about all the memories she had with Happy.
Another possibility is an accident within the story. Perhaps during a chaotic battle or a magical experiment gone wrong, Happy could be caught in the crossfire or affected by some unforeseen magical consequence. This would be a tragic turn of events for the usually cheerful and helpful Exceed.
If Happy dies, Natsu's power might be affected. Happy has always been by Natsu's side, and his death could cause Natsu to lose some of his confidence. For example, Natsu might not be as reckless in battles without Happy's support. The story could then shift to Natsu trying to regain his former self while also seeking revenge on whoever caused Happy's death.
If Happy and Lisanna die in a Fairy Tail fanfiction, it would have a huge emotional impact on the other characters. Natsu, who is very close to Happy, would be devastated. He would likely go into a state of rage or deep depression. The guild as a whole would also be in mourning. It could lead to changes in the guild's dynamic, with some members perhaps becoming more withdrawn while others might be driven to seek revenge if their deaths were due to an enemy's actions.
In some fanfictions where Erza dies, it could lead to a dark and tragic turn for the Fairy Tail guild. Her death might cause the other members to question their strength and purpose. For example, Natsu might be consumed by a desire for vengeance against the ones who caused her death.
One of the funniest scenarios could be when Happy tries to 'help' Natsu cook but just ends up making a huge mess. He might accidentally add too much of an ingredient or knock over pots while flying around the kitchen in excitement.
You could write about an alternate reality where the Fairy Tail guild is cursed and starts to die out. In this fanfiction, Gray might struggle with his ice - make magic as the curse affects his body temperature regulation. And Erza could lead the remaining members in a desperate search for a cure. They might encounter old enemies who offer help but with ulterior motives.
In some fanfictions where Lucy dies, it often leads to a dark and somber turn for the other characters. Natsu, for example, might go into a deep rage or depression. Her death could be a catalyst for the guild to seek revenge against the force that caused it. It might also result in the guild falling apart for a while as they struggle to come to terms with her loss.
Perhaps it's a matter of a powerful enemy from Fairy Tail's lore recognizing Naruto as a significant threat and using a very underhanded or extremely powerful attack on him. Since Naruto might not be fully aware of all the rules and powers in the Fairy Tail world, he could be caught off - guard. And in fanfiction, the writer might want to create a very dramatic and unexpected death for the sake of a unique story, so they come up with a scenario where Naruto dies in the Fairy Tail world.
There's a fanfiction called 'Happy and the Lost Treasure'. In this story, Happy teams up with some unlikely allies in search of a legendary treasure. It has a lot of humor as Happy's antics keep the other characters on their toes. The story also has some really cool action scenes where Happy uses his flying skills to outmaneuver enemies.