In addition to the answers already given to your questions, while you don't need to manually create different households and move them in, it is more fun and you have more control over what they look like and especially what they wear if you create your own Sims. Some randomly generated townies are still on the run from the fashion police ;) . Also, if you don't want or have time to create your own Sims to populate the worlds, you can visit the Gallery and download the Sim creations from other players that have uploaded them there. The same goes for lots.
There is no story progression other than a toggle in options to let non-played sims age or not. No marriages, no pregnancies, no divorces, completely random employment assignments, etc.
And I suppose you could build something on a lot that looks like a restaurant with the packs you have for role-play purposes or aesthetic reasons to fill up a neighborhood, but it won't come with actual restaurant game play and functionality until you install the Dine Out game pack,
https://i.imgur.com/WniCmbh.png
