The biggest difference between fiction and reality is that the former is not real. Duh. Ergo, one of the greatest challenges of fiction is making it seem real. Doesn’t matter if it’s Star Wars, Pacific Rim, or Chuck; it’s gotta feel realistic. Lived in, real.
The crew behind Star Wars, Pacific Rim, and the film adaption of The Lord of the Rings achieved this through set design. There are tiny, almost unnoticeable details all over the movie. The ships in Star Wars are old and worn; the Jaegers in Pacific Rim show signs of years of use. Compare to being told that the heroes in Pacific Rim had been fighting the Kaiju for over a decade but everything looked bright as new. We wouldn’t buy the history nearly as well as when we can see it for ourselves. It’s the same principle as in writing: show, don’t tell.
Take the simple example of the presence of the kill markings on some of the Jaegers in Pacific Rim. We don’t have any context for that, just that Striker Eureka has seen its share of combat prior to the film. It’s never elaborated on, nor is attention ever directed at it; it’s just there for the audience to see. It’s a little detail that gives a great deal of history and context for the story. Hardly anything would be lost without details like that, but its presence belies much.
The same thing can be found in characters’ dialogue. Sure, the world may be (partially or entirely) fictional for us, but not for the characters. Unlike us, they know the world, and, as such, should talk about it as if they do. Some of my favorite examples of this comes from the original Star Wars. When we first meet Han Solo he boasts about making the Kessel Run in less than twelve parsecs. What the heck is a Kessel Run? We don’t know, but Han does (and Luke the farmboy acts like he does too). At one point Leia mentions Dantooine, Obi Wan says something about some ‘Clone Wars.’ What I love is that we don’t know what any of these things are, but the characters talk about them fluidly, as well as someone in our world would discuss London or Atlanta. It makes it all feel that much more real.
But that's just the world. Characters have history too. They know people, and they know people a certain way. Let’s look at Chuck, because I love that show and am rewatching it. Whenever Chuck refers to his old friend Bryce, it’s most commonly as ‘Bryce Larkin from Connecticut.’ Let’s look at the fact that ‘from Connecticut’ is in it. It’s just two added words, but all of a sudden Bryce is given a home and we learn that he’s from somewhere. It also gives us a measure of context, seeing as it implies that Bryce was from outside Chuck’s usual world (that is, California).
You can see this in The Avengers, when Black Widow and Hawkeye mention Budapest, or Summer’s exes in (500) Days of Summer. The usage of specifics (Budapest, Charlie) lend credence to their past and make it more real.
These little things in movies (and television, books, video games; everything, really) wouldn’t really be missed if they weren’t there, but when they are they help immensely.