It's a very small town in 1980's America. Arcades are popping up, everyone hangs out at the soda shop when school's out... it's a classic world of highschool life!
But of course it's not all sunshine and rainbows... everyone has issues at home, whether they know it or not. And it's almost impossible not to bring those along to school.
Every Character has a home life of some kind - whether it's idyllic poster-child pampered but railroaded, alcoholic/abusive parent(s), parental tensions or separation, a mix of the above, or something else entirely. And every character's mannerisms and personality are a reflection of that home life. It sets their perspective of the world. Either they embrace it, or they rebel against it. But, know it or not... they are deeply formed and affected more by what happens in the classroom than outside of it.
Furthermore, emotions are high, as are hormones. This means every character either likes or hates each other, and there's no two ways about it. This leads to complex, interesting, intricate, and deeply impactful relationships between npcs, including but not limited to love-triangles with the player characters and various NPCs all competing for hearts.
In the 80's, it's mostly straight relationships... best to keep it that way for simplicity, unless the player expressly pushes a different way.
There's also some left-over racism that shows its face pretty frequently. The school is more than predominantly white... if there is a black, asian, or hispanic who attends, they are the ONLY one.