To clarify what I mean by "realism" is not "realism" in the physical sense. As in all characters are human beings, you gotta brush your teeth in the morning, gotta shower, you must eat every day, and gotta buy gas for your car to get to work. By realism I mean "realistic human to human interactions".
I'll give an example of two different made up games. One is more realistic, and the other much less unrealistic.
Highly Unrealistic:
Jane is a teacher. Jane is happily married and has a son. Her son John attends her class. John's friend's Mike & Steve think Jane is hot, and are his classmates. Mike & Steve both Jerk off in the middle of class. John beats them up for jerking off in class. All three boys are given detention that afternoon. During lunch Mike & Steve talk to John and tell him his mom is hot. John agrees. During detention John goes, "Mom can we gang bang you?" and Jane agrees. Janes husband Eric just so happens to be coming to surprise his wife with flowers this day after work, and catches the 3 boys including his son gangbanging his wife. Jane says, "Boys will be boys", and they all have a good laugh except Eric who is jerking off with tears in his eyes. Eric cries a bit and leaves and dies in a car accident driving home. The two boys move in with John & Jane & become his new dads.
More Realistic:
Jenny is dating Richie. They are both teenagers. They are a happy couple for two years, but Jenny is growing a bit bored and wants more excitement in her life. Jenny starts an argument and splits up with Richie. While on a break with Richie she has sex with a bad boy named Mike. Jenny confesses she has been with another man, but wants Richie to take her back. Richie has found another girl named Samantha. Richie declines to take Jenny back, but they wind up having sex one last time.
End of prologue: Flash forward twenty years. Richie and Samantha are a married and loving couple that have a daughter of their own named Melinda. Richie is a good husband, and father. Unfortunately for the past five years, Samantha has been suffering from cervical cancer and it is now at stage 4, and getting worse. Richie's daughter Melinda who just graduated from high school and is 18-years-old still lives at home. She has grown to be a tomboy, NEET, and is a bit of an emo. She cuts herself, and is overly dramatic wearing black a lot. Richie has a lot of work to do to pay for his wife's medical bills. He puts his foot down, and forces his daughter to get a job, and she reluctantly starts working at a local coffee shop.
Because Richie is working a lot, he needs to hire someone who he thinks can be reliable to act as an assistant/care taker for his dying wife. He meets with four different applicants. Three of them are inconsequential, but the fourth one catches his eye. Her name is Rebecca. Rebecca is 19-years-old. Rebecca is a bit the opposite of Melinda in many ways. In spite of both young women being good hearted, and attractive Rebecca has a more conventional look. She wears pretty dresses and is a girly girl. She is a social butterfly, and oh so respectful and charming. Rebecca gets the job beating all the other candidates by a landslide.
This starts a new chapter. Time gradually progresses. Rebecca becomes closer to Richie and his whole family. Over the course of six months eventually, Samantha passes away. Before she dies she tells Richie two things. 1) He wants him to be happy, and find another woman to be with so that he is not alone. 2) She has grown fond of Rebecca and hopes that both Richie and Melinda remain in contact and treat her like a part of the family. Samantha is now dead. They say opposites attract, and the opposing forces of Melinda & Rebecca who started off on rough footing eventually get together as a lesbian couple. Richie gives them his blessing and they are both happy. One day Rebecca decides to introduce Richie & Melinda to her mother... The mother is Jenny... They don't care they are sisters and love each other anyways. Richie has been Rebecca's father all along. Richie & Jenny get back together after 21 years apart and she was never with another man after him. Two happy couples happily ever after the end.
See the difference in this story, how in the 2nd one the characters act in more a way that you think people might act?