I know that one way to make NPCs feel more involved is to actually make them more involved. If every NPC has a story, that's all fine and dandy, but if it just feels like you're listening to an NPC's story, then it's not all that great. If the NPC is relevant or important to the entire plot, then that makes them a lot more interesting. Especially if they appear in multiple locations as opposed to never venturing further than a few steps out their front door.
Another easier way to make NPCs memorable is to treat them like normal characters. Think about if everyone in your game was an NPC. If every character in your game just said a few lines of dialog and moved a few steps and had no personality, it wouldn't be a good game, would it? So do the opposite. Give each NPC a personality, and make them interesting. And then your game magically becomes this huge experience and you feel like you're in the game, kinda like what the first post said.