In the lore of Native American people, there is creation story about their ancestors being star children. It goes that mankind was created from beings from the stars. As such, they believed that one day they would return.
The concept of children of the stars can be adopted to the LOST mythology.
If you break a part the main story periods, pre-Flight 815, post crash and the sideways arc, you can get a formula for the native legend.
We must assume that the events in the flashbacks were true, that the main characters lives as represented in the story. The issues, personalities, crimes, emotional problems, etc. were all part of each individual.
We know that the sideways arc was the after life. Everyone in that plane of existence was dead, but remembering their past lives seems cloudy or confused. Most of the characters actually were living separate and distinct "new" lives such as Jack, as being amicably divorced from Juliet, and being a father.
So what is the in-between state? The island may represent the transition between life and death. A level of existence where both body and soul are in the journey of dying, perhaps along the analogy of the ferryman carrying souls across the River Styx, for a price. Flight 815 was that ferry.
If the island was a world of semi-life and semi-death, the process of removing mortality to immortality, the island setting is that bridge. The characters became "star children" because in order to migrate to the universe of pure souls, they had to work out their earthly human issues and become better, content souls.
And as "children" on the island, they acted like children. That would help explain the inconsistent behavior, the lack of common sense, the elementary school soap opera romances, the "war games" in the school yard, and the fantasies that kids would like to act out.
The characters needed the island and its events to release the baggage of their past lives so their souls were properly prepared for the white light of the stars.