The core of any good game is meaningful player choices. That is, players should *have* choices and these choices should have consequences. Expand this as you see fit!

In terms of an RPG, quests provide a basis for continuing activity. Minor quests might not have any huge impact. But larger quests might result in new populations, changes in leadership, different item availibility, etc.

Say, for example, a town is near some mountains with useful ore. Suppose, also, that aggressive semi-intelligent humanoids reside in and around said mountains. We'll call them SIHs (though most games use goblin or orc). Minor quests might involve bringing back kill trophies of the SIHs, rooting out infestations, recovering looted goods, etc. More major quests might involves scouring SIH wardens and assassinating SIH leaders. If the SIHs go unchecked, metal scarcity increases, prices go up, and eventually, supply dries up entirely as miners are unwilling to brave the danger. Successes might result in lower prices, more complex metal goods, or even new veins or alloys being discovered.