To my knowledge, no. Most game ISO's for games like Dreamcast are fully assembled, so deep modifications aren't really possible.
Mild modifications can be done. Codebreaker, GameShark/Action Replay all basically modify small lines of run code to cause the game to act contrary to it's original purpose - which can unlock content already stored in the game. The fan servers of PSO do this really well, finding information in the game's data that is locked away and finding a code that unlocks that information.
However actually going into the game and altering parts of it (Such as creating new characters etc) isn't really possible, unless you have access to the source code. On PC it's not uncommon for popular engines to release their code for people to play with. Half Life Source being one of the most well known examples, but far from the first. Because consoles can't be used to modify their own games in this way (And usually for protection of a company's licences), the source codes are very unlikely to be released by the game developers - they don't see a reason to do so.
Unless the game's source code has been released by the developers, or found by hackers etc, the chances of you being able to impact too much in a fully assembled game are slim to none. Sorry