Almost 80% of the characters in my novel series actually didn't exist in the very first versions of my idea! When I first started drafting the early versions of my story, it was a really plain romance made out of my passion to at least give me and my wife's OCs an interesting story and a bit more live and personality. Though it came up pretty simple, the very first drafts were wholesome enough, and that started the spark.
Fast forward months or even a year later (i genuinely forgor how long it took us), we made new OCs, then we had our friends pitch in their ideas for their OCs and their designs that they'd like to see in the novel as well. Before I knew it, we had a bunch of characters that we could use for the writing! (Below are the some of the characters in the current main novel!)

Then much later on. In the present, the cast grew, the character ideas were there for me to use anytime. Plots and interesting arcs I have in my notes as well. It's just so fun to see simple character ideas progress grow into more polished ones. Even the very first set of OCs went through many maaanyy remakes and polishing of their lore and appearances. (below is their earliest version)

Now as for how I decided on my novel's genre and approach, I've always loved writing wholesome romance. But since I now have a goal to make it a long term project, I wanted to commit a bit to the dramatic and emotional side of things, since it makes for good practice as well.
The old plot, as mentioned above was all simple romance with barely any conflict as I focused really hard on the love and wholesomeness. I didn't even use some of the old characters from the old plot in the new plot... yet.
In the new plot it now has different stories to tell, such as one's traumatic past, a happy and sweet upbringing, or a broken hearted teenage days. And since magic and some fantasy elements now exists, I can play around and try out more ideas to keep things interesting.
I made the setting of my novel purely fictional but still takes inspirations from the real world, just so I don't have to "restrain" myself into keeping the story's setting very in line with real world details, that's too much of a headache for me imo.