I wonder, is this a world created by the game, or is it a real parallel world that the game connects to? Logically, since there are various game-like systems that affects the NPC's as well (for example, the favorability system), you'd think that the former is more likely. But then, how do you explain Lu Chao Ge's situation? It'd be one thing if he was reborn inside the game and just took over his in-game character, but since he actually went back in time to before the game even started, I'm leaning towards the latter.
Of course, it could be that all his memories prior to the system starting is just fake stuff implanted by the system... Hope not.