I am on Episode 11, they just "explained everything" but I don't understand it at all. How is a new world created? What was season one? What happens to the people from the bus?
Simply put the world that Kyousuke, Masato and Kengo created was one semester being looped endlessly.
While they were repeating, it was not a full reset, where you rinse and repeat. Rin and Riki were able to subconscious keep the experience they gained, making them stronger every loop.
They were friends even in the real world and got also involved in the bus crash of the original Little Busters.
Also to note, Kurugaya's loop was basically a loop within a loop. It was her wish to stay forever with Riki, because she knew she would never see him again.
It was believed that the gang saying farewell at the end implies they think Riki is the strong one who will have to protect Rin from now on. While direct at Riki this probably applies to Rin as well. The main loop was for both of them to get stronger in order to overcome that of what is to come for them (i.e. their actual future).
I don't believe the fate of everyone was explicitly mentioned here, but keep watching to find out.