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Can someone please tell me exactly how you customize your own character here? I’m having trouble figuring it out. 

I’ve restarted the game quite a few times and every  time have went through the process of creating the attributes and backstory of the main character and even got to the NPC section that I honestly don’t even understand what is. 

At first I thought the NPC section was there for us to pick a model and life story for the main character and the extra customizations were for us too but apparently that’s not true. I would choose what I thought was just my NPC model then choose the personality type and club and body features (hairstyle and color and chest size and eye color and freckles or moles and accessories and outfit) then I would tap on the check mark and the exist button after that thinking I made my character then go to the clothes shop to find out I only wasted my time. I would really appreciate it if someone explained this to me too. 

You're playing for a guy.

The NPCs that you set up, walk around locations, communicate with each other, and you can also communicate with them, make friends, be aggressive, have sex, etc.

What you saw in the clothing store is just a mock-up showing the clothes you are buying.