The optimization process and recommendations:

1. Create Optimal Indexes (modified query below): The recommended indexes are an integral part of this optimization effort and should be created before testing the execution duration of the optimized query.
2. Index Function Calls Using Generated Columns (modified query below): When a function is used directly on an indexed column, the database's optimizer won’t be able to use the index to optimize the search. Creating and indexing a generated column (supported in MySQL 5.7) will allow MySQL to optimize the search.
3. Replace In Subquery With Correlated Exists (modified query below): In many cases, an EXISTS subquery with a correlated condition will perform better than a non correlated IN subquery.
4. Use Numeric Column Types For Numeric Values (query line: 21): Referencing a numeric value (e.g. 1) as a string in a WHERE clause might result in poor performance. Possible impacts of storing numbers as varchars: more space will be used, you won't be able to perform arithmetic operations, the data won't be self-validated, aggregation functions like SUM won't work, the output may sort incorrectly and more. If the column is numeric, remove the quotes from the constant value, to make sure a numeric comparison is done.

Optimal indexes for this query:

ALTER TABLE `Character_DATA` ADD INDEX `character_data_idx_alive_playeruid_date_lastl` (`Alive`,`PlayerUID`,`date_lastlogin`);
ALTER TABLE `Object_DATA` ADD INDEX `object_data_idx_characterid` (`CharacterID`);
ALTER TABLE `Player_DATA` ADD INDEX `player_data_idx_playeruid` (`PlayerUID`);

The optimized query:

SELECT
        o.`Classname`,
        p.`PlayerName`,
        o.`CharacterID`,
        c.`LastLogin` 
    FROM
        `Object_DATA` o,
        `Player_DATA` p,
        `Character_DATA` c 
    WHERE
        p.`PlayerUID` = o.`CharacterID` 
        AND c.`PlayerUID` = p.`PlayerUID` 
        AND c.`Alive` = 1 
        AND EXISTS (
            SELECT
                1 
            FROM
                `Character_DATA` 
            WHERE
                (
                    `Character_DATA`.`Alive` = '1' 
                    AND `Character_DATA`.date_lastlogin < CURDATE() - INTERVAL 30 DAY
                ) 
                AND (
                    o.`CharacterID` = `Character_DATA`.`PlayerUID`
                )
        )