Kamalia asked: Whether you have many alts or just a few, do they know each other? Do they have some sort of relationship as people living in Azeroth, or is sending materials and money between them just a game mechanic for you? If your characters do know each other, what kind of relationships do they have, and how did those relationships come into being? If they don't, what functions do your different alts serve?
I have a good number of characters on Moon Guard. Most them know each other and are related by blood or by association to some degree. Some of those relationships are by design and some by circumstances that evolved over time. Some of those relationships are quite intricate and to further complicate things, the hubby and I play together so several of my toons are related/involved with several of his toons. For example:
Once upon a time, Kamyla (my Rogue), who was studying with her mother's relatives in Dalaran at the time, was swept off her feet by a dashing Paladin in shining armor named Nikandros (the hubby's DK). The two were married by Nik's godfather, Matumi (the hubby's Warlock), who was studying to be a Priest, and settled down to a nice quiet life together in the country. Life was sweet until Nikandros, and his squire Caela (my Pally), went off to Northrend to fight the Lich King and his armies. Nikandros was struck down in battle and the young squire was sent home to complete her training and inform her mentor's widow of his passing. (It did not escape their notice that word of Nikandros' demise, and a paltry death benefit, were all that was delivered to Kamyla. A body never made it home from Northrend.)
Nikandros' death had a profound impact on Caela, Kamyla and Matumi. Caela was filled with the need for vengeance and threw herself into her training. Kamyla went a bit crazy with grief and disappeared one night. Matumi abandoned his studies with the Northshire Brotherhood and took up a darker path, seeking a way to "tame" the undead as others summon and control demons. Caela and Matumi traveled the length and breadth of Azeroth together, searching both for Kamyla and any rumor of Nikandros. Meanwhile, Kamyla's cousin, Nathalee (my mage), relocated from Dalaran to Stormwind to better facilitate her own search for Kamyla. When they finally encountered Kamy, they were taken aback -- the lighthearted alchemist who'd specialized in healing potions had been replaced with a sell sword of cold and deadly efficiency who specialized in poisons. Shortly after the four were reunited, Nikandros, Knight of the Ebon Blade and recently free of the Lich King's influence, surprised everyone by turning up in Stormwind.
Thankfully, my other alts aren't nearly so complicated in their relationships. My new Dwarf Warrior is betrothed to the hubby's Dwarf Shammy, but neither of them are otherwise related to the others and their only association is as guildmates.
My three Hordies are related as well (though their relationships are far simpler). My Belf Death Knight is even known to my Alliance toons since she's part of a group hellbent on torturing and killing a member of Burning Serenity (my Alliance guild).
My Moon Guard toons know one another because their RP backstories and interactions brought them together in some way, but I never gave much thought to how my non-RP toons know one another until I was faced with Kamalia's questions. I have real life friends who play on Muradin so I have a fair number of toons of varying classes and professions on that server as well. My Muradin toons don't have backstories or personas per se so their knowledge of one another is far more limited in my mind. For example: Gitta isn't the Dwarf Paladin or someone's relative or significant other, she's The Blacksmith. Lenaria is The Leatherworker or The Tracker. Their relationships are strictly professional associations. Nothing more.
I must admit, I find it fascinating that some non-role players with toons on non-role play servers have secret backstories and personas for their characters! You can check out other responses to this shared topic here.