I personally prefer games where you have a moderate to large party selection option, and *each* character has a few personal quests that are not central or integral to the core story. The point at which they tell you about them should be relevant to the progression and relation of your core story, and the lock-out windows for doing them should, similarly, not be time based but progression based.
This encourages players to switch their party around intermittently and experience differing styles of play with different party make-ups, but it also doesn't force you to do that, if you're the sort to just switch pertinent characters in solely for their quest arcs, and then bench them again after.
In my mind, relationships have progression that you advance and develop socially by actually interacting with them and having conversations with them, which you both participate in (rather than just being ranted at by an npc...), and these allow for variable ways the relationship can advance (not all need to be positive), but at specific break points (likely the breaks between acts) relationships determine their broader evolution paths within which the finer detailed stuff expands - these are determined by major decisions made in the act, and whether or not you helped the character out with their personal stuff, and possibly how you helped them out (the outcome and choices you made for their personal stuff). Some of these branches may well be terminating if your interests don't align badly enough and the character simply isn't getting what they need here.
The idea of forcefully eliminating everyone not in your immediate party via some deus ex machina at the end of the act is anathema to good story telling, and to roleplaying games in general.
I'm deeply curious about what Swen meant by saying that you "just have to choose" just "like in real life"... like, what, honestly, is the psychology there, and how unhealthy is it?
