There is a development in fiction that is driven more by characters and settings than by story. Star Trek and Marvel Comics are definite examples.
Pretty obviously video games give you a chance to go visit a setting and interact with characters so they fit in well with that.
Quite right - and it's been that way for a very long time in novels (Jane Austen and Anton Chekov come to mind). It's fascinating to watch the development of video games as a character-driven art form; certainly for a long time they have been able to cultivate an aesthetic sense and an idea of beauty but lately we're seeing games which delve into characterization, and that only promises good things for the medium.