"the relevance of the idea to your life"
When analyzing or writing a paper about a fictional work, you could analyze the symbolism and/or implications in the piece of fiction. In the academic setting, it simply doesn't matter if ideas conveyed in writing impact your life or not.
Observer. He carefully inspects everything he sees.
There are five elements of a plot: Exposition, conflict, raising action, climax, falling action and Resolution. From these elements, the one that approaches best to that excerpt is Resolution. The word "finally" can be a signal word that denotes the ending part and Resolution means that the conflict has been solved and indicates the ending, which it really makes sense, since after all the things happened in Jake's life, at the end "I expect we'll need three servings of bacon today" refering maybe to a happy ending.