In terms of human existence, it was not so very long ago that the only thing to do for entertainment, especially in the winter, was to gather around all the family members and tell stories. It was a way of passing down history, of amusing children, and of giving them roots. These stories told where you came from, what your ancestors did, and provided a sense of identity. They strengthened family pride, and passed on traditions. They taught the young to have a sense of imagination as they visualized in their heads the places and people of the tales.
Now, we have things like television and computers to take the place of simple human speech. Children need not visualize images, because they are projected in front of them, or plastered in albums. Yet, the value of a story has not diminished.
I always tell people that if they teach me something via a story I'll never forget it. Also, stories are a great starting ground for questioning, and for understanding. The child doesn't see their parents as having ever been children at first, but hearing stories of the past will slowly make them realize that they are not alone. That generations before them have experienced the same ups and downs, same problems and feelings that they are going through. It makes it easier to relate to parents, and to learn from them- because as much as parents would love to think, at times, that telling a child or teenager not to do something will work, we all know that isn't usually the case.
"You have to give a little to get a little", the old saying goes, and it's true of communication, also. Stories provide problems and situations to envision, and if the story is true, it makes it all the more real. An adult that is willing to admit there was a time they were weak, or afraid, or confused, is much easier to approach than an adult that wants to make a child believe that they have always made the right decisions, always had the answers. Thus stories provide a view of human nature, and the child or teenager learns to trust that their own nature is good. They become more willing to ask for help or to seek out answers.
It need not be a process that is set in stone. There's no reason to make it an all the time event, where there's a set story time, though this is often enjoyable to young children. Stories are part of all of us, and we all relate to them. The story left hanging will drive you crazy, wondering the result until the tale is completed. They lead to sympathy, to empathy, and to an increased understanding of who we are and why we are that way. A story can take place on a ride to the store, as you're making dinner,or like our ancestors not long before us, on a cold winter's night when there's not much else to do. They can be real, or made up purely for enjoyment. Regardless of the stories themselves, the result will be the same. People that listen to stories find it easier to listen in general, and it becomes easier to think things through without them actually happening. It becomes easier to question, and more enjoyable just to listen and talk.