In the first part of this quote, Gene is underlining the position he is in, along with the rest of the boys in the school, regarding the war, which is the most profound event of the 20th century. Boys of Gene's age are almost certain to be called up to fight while those who are will not.
In a way, the nation's future and even the future of the world depends on Gene and his friends and young men like them. Perhaps this seems like a bit of an exaggeration, but this is the idea behind the quote.
There is a uniformity to service, both literal and figurative, which makes all young men in America roughly equivalent during the war. Age and base-line physical ability are all that seem to matter. Personality and individuality are set aside. This is what the boys have trouble understanding, according to the second part of the quote.
For much of their lives up to this point, Gene and his friends have been striving to distinguish themselves. Gene's attempts to be top of the class and his attempts at training for the Olympics become relatively meaningless.
These young men were living for the war. This continues to be true for Gene as he mentions elsewhere in the novel. The war is his constant reference frame, never fading from his mind. His world is defined, for better or worse, by the war.