Please don't list this on a work's page as a trope. Examples can go on the work's YMMV tab.
Nightmare Fuel: Terranigma
Pretty much everything about Sylvain Castle and its boss. The queen went insane after her sons died on Columbus' voyage, killing everyone in the castle and turning into a monster that, judging from the sprite, is Laughing Mad. And before the boss fight proper, you get to see dolls that represent her children play creepy games with you and scream for help from their mother once you kill them. The defense mechanisms of the castle are also quite creepy: all the water is turned into acid, the eyes of portraits are ripped out, and Animated Armor walks around in place of guards.
Don't forget that, in the dimly lit chapel of the castle, there's a lost soul who can't find its body, so it asks to tag along with Ark. Turns out its "body" is one of the aforementioned Animated Armors, and after going into it thanks Ark by trying to kill him.
The zombie town, Louran. You first see it as a thriving town full of ordinary people, but once you sleep at the inn, it's revealed to be nothing but an illusion, and the people are replaced by zombies. Zombies that rip their heads off and throw them at you. Oh, and some of the zombies are children, too.
Heck, the truth about Ark and his hometown can even be Nightmare Fuel to some gamers; fitting with the Biblical theme of Satan being unable to create life, Crysta and everyone in it is just a copy of a village on the surface. This means that the only purpose of their lives is to serve the God of Evil and they're doomed to disappear as soon as Ark succeeds.
If you go back to that cave after the boss battle for that dungeon, you'll find both of them dead.
Upon returning to Crysta, if you talk to any of the village folk, they will pretend to be relieved you're back. However, once you've walked a small distance away, they will make some disparaging remark and transform into a malignant blue spirit that chases and harms (while leaving your HP untouched) Ark. This is accompanied by the wonderfully peaceful Crysta theme turning into the eerie Gaia Stone theme that plays on your trip up the staircase to face the final boss. Cue chills down players' spines and goosebumps.
Incarnations of Elle apparently have the ability to warp people clean out of existence.