In this chapter the boys are in the hospital visiting Johnny, and then go to Ponyboy’s house and the Tasty Freeze. These events all take place after Johnny and Ponyboy return from the church incident. Johnny is dying in the hospital.
At the hospital, the boys interact with reporters. Soda in particular entertains them. This is unique to the fact that they are in the hospital, and they are there because of the incident at the church. The reporters think of them as a human interest story, because they are greasers who helped save children. It seems out of character from what people expect of greasers.
The boys go home next. Pony and the others relax there, because they are at his house, and they tease him about his hair. Here he learns about the fact that he might be split up from his brothers. The fact upsets him.
The most significant way the setting affects the plot is at the Tasty Freeze though, when the boys get to neutral territory. Here there are Socs. Pony reacts strongly.
We stopped at the Tasty Freeze to buy Cokes and rest up, and the blue Mustang that had been trailing us for eight blocks pulled in. I almost decided to run, and Two-Bit must have guessed this, for he shook his head ever so slightly and tossed me a cigarette. (Ch. 7)
Interestingly enough, Pony has a conversation with Randy that is eye-opening. He learns that Randy does not want to fight, and is reminded of his other conversation with Cherry where he learned that Socs are people too. He realizes that Socs feel loss. While he is suffering over the loss of Johnny, the Socs suffer for the loss of Bob.
Socs were just guys after all. Things were rough all over, but it was better that way. That way you could tell the other guy was human too. (Ch. 8)
After this, Pony has a different perspective on the fighting. It affects his attitude going forward. Johnny will tell him later to “stay gold” and ask him to make something better of his life. Pony has a chance to get an education, and become something more.