What is the Sims 2 story making mode?

Answer 1

it is the area where you can make up a background story to what you created, make problems, etc. for your newly made neighbor hood, gl with the game!!!

Answer 2

The story doesn't affect the game much. It's just a nice backstory you create to make yourself feel more immersed in the game. Honestly, the stories from the pre-made neighborhoods mean more since they actually have something to do with the neighborhood. It reveals your neighbors personalities and motives making you feel even more immersed than you would from a custom story.