Each sim has a chosen career path, you can get yourself fired by missing work too often so you can try another career, and the higher you are promoted in a career the more simoleans you earn per day to buy more and better stuff. To earn promotions a sim must improve themselves in various areas including physical fitness, creativity, logic, cooking and mechanical skills. Sims learn by using different items in the home. For example, playing the piano is fun but also over time improves the sim's creativity. Each sim has a relationship rating with every other sim they have met in the neighborhood.
Ratings run the gamut from hate to love.
Friends are required in order to advance in your career and if you want to get married you need to interact a lot with another sim, feed them, entertain them, make them comfortable with you and then pop the question. Over time you may get asked if you want to adopt or have a baby. No, sex is not modeled in the game. The stork brings the baby I suppose. If you keep the baby fed and happy for three days, tougher than it sounds, they magically become a kid.