I haven't played a fighting game since Smash Brothers Brawl and apart from the SM series the only other I know is Killer Instincts but any one of these locations would make an awesome fighting game arena IMO.

Land of Departure -> Castle Oblivion -> all worlds of Soras memories -> repeat

I'm going with The End OF The World.  It's naturalistic setup would make for some interesting twists and turns in the midst of battle.  The scenery could modify itself into crumbling forms of other worlds, too.

 

All the other words listed are so concrete, the backdrop would remain the same throughout.

 

Would love to see both the Keyblade Graveyard and The World That Never Was since both worlds are pretty big and have cool setting. Plus, having Kingdom Hearts hanging in the background would be a great touch

Even though Keyblade Graveyard is my favorite Kingdom Hearts world, I think that Destiny Islands would make the best world.  The world is iconic and is Sora's home, and since Sora would probably be the playable character from the Kingdom Hearts series, Destiny Islands makes the most sense to me.

I think that the Sandlot would make for a perfect arena for Dissidia, as it's a closed arena, allowing for some tense, close hand to hand combat! Dissidia 012 had one or two close quarters arenas like this, so having the Sandlot would add to that awesomeness!

 

Other places I could see are Olympus Coliseum, for obvious reasons, and the Keyblade Graveyard! I'd imagine it would be like the Lunar Subterraene in Final Fantasy IV!