The stars have no life because they are highly hot.
This is an interesting question. We might as well ask why there are so many trees in a forest and what are they there for. I don't think I can answer for the purpose of the stars, maybe there isn't one. If there is does that imply a higher being directing the universe? I'll leave you to decide that for yourself.
As for why there are so many stars in the galaxy - well that's the definition of a galaxy (just like you could say that the reason there are so many trees is that you are in a forest). Stars form out of giant clouds of dust and gas in galaxies. Since so many formed we can assume that it's quite easy for them to do that, or that the galaxy has been around a very long time. Probably both apply.
We actually live in a quite unpopulated area of the galaxy, almost two thirds of the way out. If we were closer to the centre there would be many more stars in the sky.