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What is the difference between an abbreviation and a contraction?
What is the difference between a contraction and a portmanteau?
What are contractions (words)?
As in, "Ya never know when the mood'll strike." or "Mary'll know the answer"?
I just know I can use it with personal pronouns, but I don't know If I can use it with nouns
Short answer: yes. It'll be understood, and if it's seen as a mistake, it'd be one of register rather than of grammar.
Longer answer: contractions are informal by nature, so if you're asking about formal written English, then any contraction is frowned upon, whether it's "it's", "you're", or "John'll".
So we're clearly talking about less-than-formal English, where the rules (such as they are) get fuzzy.
In spoken English, contractions are totally fair game. In fact, you really have to pay attention to even notice whether someone said "I am" or "I'm". The difference between "John will" and "John'll" is a bit more audible, but it's still perfectly fine to say the latter rather than the former.
In written English, the contractions you choose to use, or not use, determine the level of informality. In this sense, "John'll" is a bit more informal than "you're", but there are very few contexts where the latter would be acceptable while the former wouldn't be.
Bottom line is, in an informal context such as a video game, usage such as "John'll" simply adds to the colloquial, informal nature of the dialogue/narration. It is not, in and of itself, a mistake.
If this is for dialogue in a video game, then why would it matter if it's formally correct?
What are you striving for? To mimic the way the characters would actually communicate? Or to write a script that would pass for formal prose?
Authors such as Mark Twain, Stephen King, and Harper Lee often used constructs like this to add a sense of realism to the dialogue in their books, knowing that people often speak in a less formal way than they might write polished text.
“Let him alone,” said Stuart Mordaunt. “His brother's absence has upset him, but Jim'll come round all right.” (Mr. Groby's Slippery Gift by Paul Laurence Dunbar)
“I think that cat'll outlive us all,” I said and patted Tim on the shoulder. (Night and the Cat by Alan Adler)
By striking such contractions from the video game, you run the risk of having language that might sound artificial and contrived.
Incidentally, this is why you were asked about where you would use this, and why “people seemed to care.” If you were presenting at an academic conference, I think it would be a terrible idea to write Dave'll go next on one of your presentation slides. But that doesn't mean such informal phrasing should be removed from a video game dialogue. The theives in Grand Theft Auto don't generally speak like English gentlemen.
When you don't provide adequate context, the community cannot provide an accurate answer.