Xenoblade Chronicles is a large game, with quite literally hundreds of sidequests.
Altogether, there are 480 quests. Approximately 25 of these are story quests, (forced quests where the story cannot continue until completed, indicated by a diamond around the quest icon), 6 of these are mutally exclusive (only one can be completed, indicated by a timer next to the quest), whilst roughly 100 more are timed (expire during certain story events, indicated by a timer next to the quest).
Completing quests gives you affinity for the area. Affinity is needed to trade for better items, to unlock certain heart to hearts, and to lower the prices in the shops in the area. It also opens up new quests. Depending on the type of quest, you may recieve exp., gold, an item, skill trees, Monado arts, new affinity links between characters, or a combination of those mentioned rewards.
